Boston, MA -- (ReleaseWire) -- 01/08/2014 -- We forecast fairly modest growth in Israel's freight transport sector in 2014, though this will be an improvement for air and rail freight volumes, both of which have suffered declines in recent years. The major port of Ashdod also suffered an estimated fall in volume handling in 2013. Political risk from the civil war in Syria and escalating sectarian tensions in Lebanon could all weigh on the Israeli economy and its freight transport sector (though this also presents transit opportunities). However, with the eurozone set to return to growth following two years of economic contraction, Israel could see a boost in its export volumes. The country is looking towards the future, and is committed to developing its ports, though this brings with it strike risk from workers disgruntled at the planned privatisation of key facilities.
Headline Industry Data
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- 2014 air freight growth is forecast at 1.4%; we project average growth of 1.8% per annum to 2018.
- 2014 Port of Haifa tonnage throughput growth is forecast at 7.2%, and to average 5.1% per annum to 2018.
- 2014 rail freight tonnage is forecast to grow by 1.4%, and to average 2.1% to 2018.
- Total trade growth in real terms in 2014 is forecast to grow 3.3% and average 3.3% to 2018.
Key Industry Trends
Eurogate's Bid For New Israel Box Terminals A Win-Win: Eurogate is reportedly planning a bid to operate two new container terminals on the Israeli coast. Eurogate's main operations have traditionally focused on Europe, but if it is successful the firm will gain exposure to the high-growth MENA region, traditionally dominated by DP World and Gulftainer. For Israel, the country has fallen behind the trend of being able to cater for mega-vessels; an experienced operator such as Eurogate will bring with it much-needed expertise and investment. El Al Net Profits Rise 54% In Q313: Israel's flag carrier El Al Israel Airlines registered a 54% increase in Q313 net profits to US$57.86mn. The increase is attributed to a rise in revenue and other efficiency measures as the carrier continued to reduce its workforce.
Port Workers Expected To Go On Strike: Israeli ports were expected to shut down in the week ending November 23 due to a strike by port workers, according to Transportation Minister Yisrael Katz. Port workers are protesting plans to increase competition in the sector. Katz added that the strike would adversely affect the economy as 90% of its international trade passes through the country's three maritime gateways.
Key Risks To Outlook
Israel's drive to develop its port sector through establishing private facilities offers the greatest risk to our outlook at present given the high likelihood that the existing ports of Haifa and Ashdod will stage strikes in protest against the move.
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