A recent poll on arabiansupplychain narrowly suggested that visitors to this website thought that worldwide trade volumes would turn the corner some time before the end of this year.
On the face it of it, it’s hard to work out why regional executives have such a positive outlook on the next few months. Global cargo volumes travelling both by sea and by air have spiralled downwards over the last year or so, and only the much-lowered price of fuel has provided any sustenance to players. The most recent OECD release forecasts that international trade will fall by more than 13% in 2009.
But here in the Middle East, trade volumes have remained relatively healthy and robust. In fact, the biggest of this region’s operators have been hurt not by a slowdown in their own markets, but by difficulties in others.
Take DP World – a company whose ratings were cut by S&P in mid-March due to concerns over Dubai's international debt. The Dubai ports giant saw profits after tax rising by 48% during the course of last year, although it has seen significant volume drops at the beginning of 2009.
Most of these drops have been in the “developed regions” like Europe, according to the operator, which have seen double-digit declines; the UAE, by contrast “remains a major exception”. Small wonder that company CEO Mohammed Sharaf bought another 115,000 shares at a rock-bottom price shortly after the results were announced.
Then take the examples of Asian port giants Hutchison Port Holdings (HPH) and PSA International. Both giants saw profits decrease last year, by 42% and 46.2%, respectively. Whereas DP World’s best results were in its home market and emerging ports, HPH and PSA International’s best figures were gained outside their home region and traditional trade hub of Asia.
And while it’s too soon to call the turning point in the airfreight market, IATA’s latest air cargo figures make positive reading for the Middle East’s logistics players.
Even allowing for the fact that GCC freight companies will obviously still suffer from dropping volumes in the areas of the world in which they operate and that the market here is not as large as elsewhere, there are still reasons why carriers in this part of the world should feel encouraged.