Belgium Freight Transport Report Q3 2009

According to Journal of Commerce Online, the Port of Antwerp registered a container throughput decline of 16.3% year-on-year (y-o-y) to 1.74mn twenty-feet equivalent units (TEUs) in Q109, compared to 2.08mn TEUs in Q108. In the same period, the port's overall traffic plunged 19.3% y-o-y to 37.3mn tonnes from 46.2mn tonnes in Q108. The port's liquid bulk and dry bulk shipments posted a decline of 4.1% y-o-y and 40% y-o-y respectively in Q109. Belgium's geographical location between Germany and France allows it to play a multimodal hub role, with Antwerp as a significant north European port - ranking among the top 10 ports in the world. The port is facing growing competition from Hamburg and Rotterdam. The company's spokesperson stated the throughput decline was primarily due to lower imports of steel, wood and granite, and this may continue with overall cargo traffic expected to decline by 15% and container volume by around 20% in 2009.

In our latest Belgium Freight Transport Report, the overriding story continues to be about the impact of the recession on the freight sector. We expect Belgian GDP to fall by 2.3% in 2009, and for there to be zero growth in 2010. As a result, average annual GDP growth across the 2009-2013 five-year forecast period will be only 0.7%. We expect annual average growth in freight carried across all modes, measured in million tonnes-km (mntkm), to be 0.5% during the forecast period, lagging the economy as a whole.

Despite the poor market conditions, this rate will be supported by greater infrastructure investment.

Although we are relatively confident of the industry's resilience, the risks to the freight sector do lie on the downside, particularly because of the intensity of the European and global recession.

For the 2009-2013 forecast period, we expect the value of activity in the transport and communications sector to continue outpacing the economy as a whole. It will achieve average annual growth of 1.1%, versus 0.7% for overall GDP. The total value of transport and communications GDP will rise to US$19bn in nominal terms by 2013, representing 6.8% of Belgium's GDP.

Our overall forecast for freight carried in Belgium is for low growth based on a mature industry, good infrastructure, a reduced economic growth rate, and the country's openness to foreign trade. We see the best performing sector to be airfreight, which - with annual average growth of 1.0% - will come through another period of relative turbulence in the sector caused by a new peak in energy costs. A smaller European carrier, SN Brussels Airlines may be absorbed by Lufthansa in the next round of regional consolidation, although there is a question mark over regulatory approval. If the takeover goes ahead, it will not necessarily be negative for airfreight volume growth, and could conceivably boost it further. Rail freight and pipeline throughput are both expected to grow by an annual average of 0.8%, just ahead of GDP expansion - this is due to new investment in infrastructure. We see road freight broadly in line with GDP, with an average annual growth of 0.7%, reflecting the impact of the recession on freight demand.

Sea freight will grow by an annual average of 0.3%, brought down by a sharp recession in 2009. Inland water transport will grow by an average of 0.4% per annum.