Boston, MA -- (ReleaseWire) -- 02/04/2014 -- Following a year in which BMI believes saw mixed growth dynamics in different freight transport modes, 2014 will signal improvement and growth across the whole sector in line with macroeconomic outlook for the country.
Total trade is projected to pick up with our Country Risk desk forecasting a year-on-year (y-o-y) increase of 4.65% in 2014 following an estimated growth of 3.75% in 2013.
Rail freight is to continue to dominate the sector in terms of turnover and is projected to grow by 2% in 2014. We are seeing a consolidation of players in this freight transport mode, with major mining and steel producing firms selling their transport subsidiaries and major private logistics players developing in Russia's rail freight system.
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We also highlight the impact that the Sochi 2014 Winter Olympic Games will have. All freight modes are set to benefit, specifically those in the Krasnodar region.
Global Ports' acquisition of National Container Company has not only created Russia's largest port operator, but also the largest in Eastern Europe and in BMI's view will be a stepping stone to the company developing its role regionally and potentially internationally.
The final theme is Russia's recent membership of the World Trade Organization (WTO). As President Vladimir Putin has highlighted, the benefits of an uptick in trade volumes won't be felt straight away, but we believe Russia's freight transport sector will start to fill a positive impact over the medium term.
Headline Industry Data
- 2014 Air freight is expected to grow by 4.7%
- 2014 Rail freight is forecast to grow by 2.2%
- 2014 Port of Novorossiysk throughput is forecast to grow by 1.8%v
- 2014 Road freight is forecast to grow by 2.5%
- 2014 Inland waterway freight is forecast to grow by 2.0%
- 2014 Total real trade growth is forecast at 4.7%.
Key Industry Trends
AirBridgeCargo's Growth Outpacing The Market: Russia-based AirBridgeCargo (ABC)'s latest yearto- date results show relatively robust growth in the first eight months of 2013 at a time when the global air freight sector is still in recovery. ABC has achieved this by procuring new aircraft and adding new routes to its service, specifically a dedicated service to Sochi as it seeks to benefit from the Russian city hosting the 2014 Winter Olympics. We expect ABC to continue to have continued benefitting from its exposure to the Sochi Olympics for the rest of 2013 and into 2014.
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