High levels of international trade left the industry highly exposed to the global downturn.
Melbourne, Australia (PRWEB) February 07, 2014
Over the past five years, the Water Freight Transport industry has been transporting increasing volumes of freight between Australian and foreign ports, but at freight rates that have been low by historical standards. Despite strong demand growth from major markets, industry revenue grew at the low compound annual rate of 1.1% over the five years through 2013-14 to reach $2.7 billion. The industry is highly globalised. IBISWorld industry analyst Caroline Finch states “international trade, and the strong presence of international shipping companies on Australian routes, left the industry exposed to the difficulties of the global industry in the past five years. These stem from the global financial crisis, which marked the end of a decade long boom in demand for global shipping.” Globally, operators had placed large orders for new vessels. When demand for transport dropped during the global recession, ship owners were unable to decommission vessels quickly. In fact, new capacity continued to come online through to the 2012 calendar year, as orders that had been placed up until 2008 were delivered. With systematic oversupply and low volume demand, prices for water transport services sunk. In the Australian industry, shipping rates followed global trends downwards. Despite ongoing volatility, global shipping rates appear to have settled at a new, lower level in the past three years. From here, they are likely to exhibit mild growth, as the number of new ship launches globally is expected to slow. Gradually, global supply is expected to adjust to better match demand.
The Water Freight Transport industry is expected to perform more strongly in the next five years. In 2013-14, increasing volume demand is forecast to outweigh lower price levels, with the industry set to expand by 4.6%. This reflects a trend of increasing demand for industry services, which is forecast to carry the industry to new heights in the next five years. According to Finch, “the Mining division is forecast to grow in importance to the industry, with the mass of exports transported by sea expected to rise.” Merchandise trade imports and exports are also forecast to expand.
The industry has is highly concentrated. Market share concentration is high because of the large capital investments made in ships by the major players. The larger the size of the ship, the more they benefit from economies of scale. Market share concentration has been diluted over the five years through 2013-14. The growth in demand for bulk shipping has supported the entry of more specialised international bulk shipping companies into Australia. The industry’s major players include ANL Container Line, Hapag-Lloyd (Australia), ASP Pacific Holdings and Maersk Line. For more information, visit IBISWorld’s Water Freight Transport report in Australia industry page.
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IBISWorld industry Report Key Topics
This industry operates vessels that transport freight by water. Primary activities include coastal sea freight transport services between domestic ports, freight ferry services, harbour freight transport services and international sea freight transport services between domestic and international ports. Further activities include river freight transport services, ship freight management services (the operation of ships on behalf of owners) and inland water freight transport services.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Basis of Competition
Barriers to Entry
Technology & Systems
Regulation & Policy
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