Headline Industry Data
?? 2011 port of Shuaiba tonnage throughput is forecast to grow +3.4% following projected growth of 1.0% in 2010, and to average 5.3% to 2015.
?? 2011 air freight tonnage growth forecast +6.2% and to average 5.3% per annum to 2015.
?? 2011 total trade growth forecast is +2.5%, and to average 3.9% to 2015.
Key Industry Trends
The Middle East and North Africa region has seen huge upheavals since the start of the year, and no country is immune from the repercussions on trade. Kuwait has not been one of the country's most hit by unrest, but it is still possible that demonstrations could develop as they have in other Gulf countries, which could impact adversely on our port throughput and air freight forecasts. Further Potential downside risks to our throughput forecasts come in the form of the exposure to oil price volatility and a slowdown in global demand. Despite the broadly healthy picture of Kuwait's public finances, high reliance on oil, which accounts for 94% of total revenues, exposes the budget and, consequently, trade to oil price volatility.
Move One Inaugurates New Warehouse In March 2011 UAE-based logistics specialist Move One inaugurated a new freight facility in Kuwait. The 3,000m2 warehouse will allow the company to transport freight to and from Camp Arifjan, one of the largest US Military bases in Kuwait. The new warehouse will also enable the company to offer unparalleled air, sea and road transportation services and complement its recently expanded office in the Al-Qiblah district. In addition, the warehouse is also to offer online shipment tracking, supply chain purchase order management, secure convoy transport and comprehensive warehousing services.
New Regional Air Service In May 2011 Qatar Airways opened a new dedicated freighter service between Doha and Kuwait City. An Airbus A300 freighter craft will be deployed on the route, and will transport items such as pharmaceuticals, clothing and food stuffs, in addition to equipment for oil companies. Akbar al-Baker said of the new service: 'Adding Kuwait to our cargo network adds further momentum to our surge in trading in our neighbouring Gulf countries. Kuwait imports a lot of manufacturing goods and based on our prime geographic position, we can offer fast services from across South Asia, Africa, Europe, North and South America and Asia-Pacific.'
Between Iraq And A Hard Place: New Kuwaiti Port To Take Iraqi Custom
The foundation stone for the new Kuwaiti port of Mubarak al-Kabir was laid in May, setting in motion the Kingdom's plans to become a major trading hub for the region. BMI notes, however, that the port's success is likely to rely on thwarting Iraqi ambitions to claim the same crown, and the stone-laying ceremony has reawakened tensions between the two neighbours.
Risks To Outlook
Global shipping continues to suffer from the glut of vessels ordered during the pre-downturn boom years for shipping coming online. With demand still struggling to recoup previous levels, the three shipping sectors - container and dry and liquid bulk - are all struggling to maintain healthy rates in the face of overcapacity in the global fleet. Indexes are falling and ships are increasingly being forced to operate below break-even rates. Huge geopolitical black swan events, such as the Arab Spring and the Japanese earthquake, have further complicated the market dynamics in the shipping sector.
Kuwait's ports are still struggling to recoup the volumes of throughput they enjoyed prior to the world economic downturn, and BMI does not expect them to do so this year or that some will see their volumes return in 2012 either. Middle Eastern unrest could add further woes to the ports, but the high oil prices they have caused could also provide upside risk as the Kuwaiti consumer becomes richer on the back of them. By contrast, Kuwaiti air freight is growing and we expect it to continue to do so. The Middle East has been an outperformer in terms of air freight growth over the past 12 months, though this has slowed recently on the back of unrest also.
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