Boston, MA -- (ReleaseWire) -- 04/30/2014 -- The outlook for the Saudi Arabian freight transport sector is upbeat. Although some ports saw a contraction in either gross tonnage or container handling, or both, in 2013, 2014 will see these facilities return to growth. It should also be noted that the 2013 contraction followed extraordinary growth in 2012 as the government stimulus package made itself felt. We believe that growth at Saudi Arabian ports will remain strong over the medium term, and the construction of new facilities will serve to strengthen the sector further.
The other freight modes are also set for strong growth, with air freight performing well with the help of national carrier Saudia, and the country's rail freight sector expanding at an impressive rate.
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Specific investments in expanding maritime facilities, and in projects such as the Saudi Landbridge and the north-south railway, coupled with strong economic growth on the back of large oil receipts, will continue to boost freight volumes over the medium and long term.
Headline Industry Data
- Total Saudi Arabian trade set to grow by 3.2% in 2014 in real terms, with imports growing 5.0% and exports by 1.4%. This marks a return to growth following 2013's contraction. Real trade growth will average 2.5% to 2018.
- Air freight volumes set to grow 7.5% in 2014, to reach 766,160 tonnes. Growth to 2018 to average 6.5% a year.
- 2014 Jeddah Islamic Port total tonnage throughput forecast return to growth at 4.4%. Growth will average 5.2% from 2014 to 2018.
- 2014 rail freight volumes forecast to grow by 9.0% in 2014 and to average 10.5% over our forecast period.
Key Industry Trends
RSCT Expanding In Preparation For Landbridge Role: Saudi Arabia's Red Sea Gateway Terminal (RSCT), Jeddah Islamic Port's (JIP) newest container terminal, is planning to expand further. The terminal is seeking to increase its capacity to 2.5mn TEUs by 2015. The project will ensure that JIP retains its position as Saudi Arabia's premier container port and that it is able to keep pace with the Kingdom's expanding economy, population and the launch of the Saudi Landbridge.
Saudi Cargo Records 8% Rise In 2013 Cargo Volumes: Saudi Airlines Cargo (Saudia Cargo) maintained a solid performance in 2013 amid a challenging economic environment. The airline registered an 8.0% year-on-year (y-o-y) rise in cargo volumes to 557,800 tonnes in 2013. In the reported period, scheduled air freight revenue also grew by 6.0% y-o-y. Both scheduled revenue and charter cargo services posted a rise of 12% and 141% respectively in December 2013.
Rail Investment: In common with the other countries of the GCC, Saudi Arabia is investing hugely in developing its rail infrastructure. It was reported in December that this was set to top US$79bn over the next decade, while logistics projects connected with the rail development would reach US$3.7bn by 2015.
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