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Recently Released Market Study: Estonia Shipping Report Q3 2012

New Transportation market report from Business Monitor International: "Estonia Shipping Report Q3 2012"

 

Boston, MA -- (ReleaseWire) -- 08/22/2012 -- BMI View: Bulk Tonnage Down, Containers Up

Compared to out last quarterly report, we have reduced our gross tonnage forecast for the Port of Tallinn, but raised the outlook for box traffic in the same port. We now expect that the former will contract by just under 10%, while the latter will grow by just under 20%. This 'tale of two halves' reflects the evolution of two main factors. As far as gross tonnage is concerned, the key influence is growing competition from the new Russian Port of Ust Luga on the Gulf of Finland, which is gaining a greater share of liquid cargo business (basically crude oil and oil product shipments) at Tallinn's expense. The generally sluggish state of the European and global economies is a contributing factor.

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The box story, however, is something else: it is being driven by the reasonably strong performance of the Estonian economy and Tallinn's emerging role as a gateway port. It is true that we have reduced our forecast for Estonian GDP this year to growth of 2.7%, compared to 3.0% previously, with both consumption and investment reacting to the eurozone economic crisis. That said, we note that Estonia is set to be the fastest-growing economy in Europe for the second year running. Additionally, the total value of foreign trade is set to grow by 7.8% this year - about a third of the pace achieved last year, but nevertheless a strong showing in current conditions, and more than double the domestic economy's growth rate. It is this, together with Tallinn's gateway role supplying a range of neighbouring economies, from Ukraine to Kazakhstan, that is keeping the box business healthy. Estonia has good medium-term prospects and we expect GDP growth to average 3.2% over the next five years.

Headline Industry Data

- Port of Tallinn gross tonnage set to fall by 8.0% to 33.549mn tonnes in 2012, following a 0.5% fall in 2011.
- Box traffic at Tallinn to grow strongly, increasing by 18.0% to 233,306 twenty-foot equivalent units (TEUs) in 2012, down from 30.1% growth the year before.
- Estonian foreign trade to gain 7.8% in real terms in 2012, after 25.9% growth in 2011. Import growth will lead with 10.0% expansion, ahead of exports, which will be up by 5.7%.

Key Industry Trends

Profits Up At Tallinna Sadam

Tallinna Sadam, the company that runs the Port of Tallinn, reported a nearly 12% increase in first quarter net profits to US$19.1mn, on sales of US$32.7mn. Improved profits were achieved despite a 9% fall in gross tonnage to 8.3mn tonnes, caused by a fall in liquid cargo volume. Tallinn operates a number of harbours and terminals, the most important of which is Muuga, which handles about 80% of the port's total cargo volumes and processes around 90% of all transit cargo passing through Estonia.

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