Page 1 - Malaysia Freight Transport Report Q3 2012 Published: June 2012

No. of Pages: 50

Price: US $ 1175

Two forces appear to be pulling the Malaysian freight sector in different directions this year. On the downside, the world economy remains somewhat troubled, and global demand has weakened. This means that Malaysian GDP and foreign trade growth is slowing down in 2012 compared to 2011. BMI predicts GDP growth at 3.3%, down from 5.1% last year, for example. But on the upside, the country’s major ports (Port Klang and Port Tanjung Pelepas), along with land-based freight transport modes and air freight, all look like continuing to outperform relative to GDP for a variety of reasons. These include greater reliance on intra-Asian and local trade, the impact of fairly aggressive capacity expansion programmes and relative success in the management of corporate partnerships. As a result of these countervailing forces, we are holding our main projections unchanged compared to our last quarterly report. Headline Industry Data    

The real value of Malaysia’s total trade will rise by a predicted 3.4% in 2012, a slowdown on the estimated 4.5% expansion experienced in 2011. Total cargo volume handled at Port Klang will rise by 7.7% to 197.70mn tonnes in 2012, while volume at the Port of Tanjung Pelepas will rise by a slightly higher 8.2% to 130.09mn tones. Rail freight volume is projected to rise 6.6% to 5.83mn tonnes in 2012 and to average 6.4% annual growth in the five year period to 2016. Air freight volume is set to grow by 3.9% to 1.37mn tonnes in 2012, up on the 2.7% growth rate achieved in 2011.

Key Industry Trends Big Transport Infrastructure Investments On The Way Government officials say planned infrastructure investments now stand at US$70bn, and as Malaysia’s population is becoming more urban, so it is becoming necessary to improve transport links in Kuala Lumpur and other densely populated areas. There are plans for seven new toll highways, the privatization of Penang port, a freight railway and various integrated public transport schemes. China''s ''Railway Vision'' May Be Delayed China’s ambitious plan for a vast railway network linking Kunming via Thailand and Malaysia all the way through to Singapore may be facing some difficulties and delays, according to reports in March. It was assumed that Chinese companies and technology would lead the way, with generous funding from Chinese state banks. But following the replacement of China''s rail minister in the wake of a corruption scandal, Thailand has signaled it wants to cap Chinese involvement in building its high-speed rail network. Malaysia''s Chinese-backed double-tracking programmed has also run into some local political obstacles. The result is that the ambitious project may take longer to achieve. Westports Expects To Handle Over 7mn TEUs The chairman of Westports Malaysia has delivered an upbeat message despite the sluggish global economy, saying he expects the privately-owned terminal will handle 7mn twenty-foot equivalent units (TEUs) this year, up from 6.5mn in 2011. He also underlined the importance of the company''s US$1bn investment programme, which among other things involves the completion of four new terminals by 2016, to add to the five already in operation. Key Risks To Outlook In our last quarterly report we identified two downside risks to our freight forecasts: first, a sharper-than expected slowdown in global economic growth; second, domestic political risk factors

associated with the impending Malaysian general elections. We continue to believe these are the most significant risks, but in reverse order. We think domestic political risk factors have moved up to the forefront. This is due to increased speculation that the government may call early elections, perhaps as early as mid-2012 (under existing regulations, elections must be called no later than March 2013). The risk is that during an election campaign the business community will take a ''wait and see'' attitude, and perhaps put investment projects on hold. However, we have to say this is a relatively small risk, given that we do not expect any fundamental changes in economic policy; we also believe the balance of probabilities is that the ruling Barisan Nasional (BN) party will be re-elected. As for the second risk - a sharper than expected global economic slowdown - we think it remains present, but its importance is beginning to wane a little. The eurozone financial crisis continues to weigh on business confidence, and the Chinese slowdown is of concern because of its impact on Malaysian exports. But as time goes on, the US economy is showing signs of emerging from recession and there seems to be scope for some cautious optimism about 2013.

Malaysia Freight Transport Report Q3 2012 Table of Contents Executive Summary . 5 SWOT Analysis 7 Malaysia Freight Transport Industry SWOT .. 7 Malaysia Political SWOT ... 8 Malaysia Economic SWOT 9 Malaysia Business Environment SWOT ... 10 Industry Trends And Developments 11 Logistics/Multimodal ... 11 Rail .. 11 Air 13 Maritime .. 13 Market Overview 17 Industry Forecast ... 19 Air Freight ... 19 Maritime Freight.. 20 Rail Freight .. 21 Trade 21 Global Oil Products Price Outlook ... 24 Political Outlook 33 Domestic Politics . 34 Long-Term Political Outlook ... 35 Macroeconomic Outlook ... 39 Company Profiles .. 42 MASkargo 42 Country Snapshot: Malaysia Demographic Data ... 44 BMI Methodology ... 48 How We Generate Our Industry Forecasts .. 48 Transport Industry ... 48 Sources 49 - Malaysia Freight Transport Report Q3 2012  

Two forces appear to be pulling the Malaysian freight sector in different directions this year. On the downside, the world economy remains s...