Malaysia Freight Transport Report Q2 2014 - New Market Study Published

From: Fast Market Research, Inc.
Published: Wed Mar 12 2014

Cooling External Demand To Weigh On Sector

Malaysia's latest real GDP growth reading came in decisively weak at 4.3% year-on-year (y-o-y) for Q213, vindicating our core view that cooling Chinese economic growth would weigh heavily on the export sector. Indeed, looking at the breakdown of GDP by expenditure, the weaker-than-expected reading (Bloomberg consensus stood at around 4.8% prior to the release) was largely due to a sharp contraction in net exports. Net exports suffered the sixth quarter of contraction since Q411, recording a negative 3.3 percentage points (pps) contribution to headline growth of 4.3% y-o-y in Q213. Looking ahead, we expect cooling external demand to continue to drag on the overall economy and that Malaysia's full-year real GDP growth will come in relatively weak at just 4.6%, with the balance of risks slightly skewed to the downside.

Full Report Details at

Activity levels across Malaysia's different freight modes will grow in a rough 2%-4.0% range in 2014, lagging a little the growth rates achieved by the wider economy and the foreign trade sector. However, as infrastructure investment plans are advancing, Malaysia will be gradually expanding its freight capacity.

Headline Industry Data

* The real value of Malaysia's total trade will rise by a predicted 4.4% in 2014, a slight slowdown from the estimated 4.5% expansion experienced in 2013.
* Total cargo volume handled at Port Klang will rise by 3.0% to 209.8mn tonnes in 2014, while volume at the Port of Tanjung Pelepas will rise by a marginally higher 3.2% to 126.2mn tonnes.
* Rail freight volume is projected to rise 2.2% to 6.379mn tonnes in 2014 and to average 3.9% annual growth in the five-year period to 2018.
* Air freight volume is set to grow by 0.6% to 927,000 tonnes in 2014. Average growth in the next five years will be a slow but steady 0.5% per annum.

Key Industry Trends

Global Logistics Providers Expand Malaysian Presence: In November 2013, DHL Global Forwarding, the air and ocean freight specialist unit of Deutsche Post DHL, unveiled its new hub facility in Tanjung Pelepas. The 160,000sq ft facility is managed by International Supply Chain (ISC), a specialist logistics unit of DHL Global Forwarding, and DHL Supply Chain, the contract logistics unit of Deutsche Post DHL.

Given its location at Malaysia's most modern container terminal, the hub is set to become a prime location for multi-country consolidation and regional distribution for the US, European and Australasia markets, said said Kelvin Leung, CEO for Asia Pacific, DHL Global Forwarding.

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