Colombia Shipping Industry Update Quarter 3 2012

• Publication date: June 2012
• Report size: 131 pages

Includes 3 FREE quarterly updates Our outlook for the Colombian ports and shipping segment remains positive, with a backdrop of strong domestic economic growth, as well as support from external demand for commodities. There are also encouraging signs of badly needed investment in transport infrastructure, both in the country's ports and in the freight transport infrastructure that feeds them, on the back of the country's developing...

Includes 3 FREE quarterly updates

Our outlook for the Colombian ports and shipping segment remains positive, with a backdrop of strong domestic economic growth, as well as support from external demand for commodities. There are also encouraging signs of badly needed investment in transport infrastructure, both in the country's ports and in the freight transport infrastructure that feeds them, on the back of the country's developing mining segment . However, progress on such projects is often delayed, and BMI cautions that bottlenecks may remain a problem for some time.
Colombia's economic expansion continues to power forward, in line with our projection for real Gross Domestic Product growth to reach 4.7% in 2012. Private consumption, fuelled by credit expansion and historically low interest rates and fixed capital formation, especially in the energy and mining segments, will continue to spearhead Colombia's long-term growth, underpinned by a strong performance in commodities exports, all of which bodes well for investment and volumes in the country's shipping segment .
Our Oil & Gas team projections total oil production to grow by 8.7% to 990,070b/d this year, as production increases at both current and new fields. Moreover, exports are likely to be helped by high oil prices over the coming months, due to elevated geopolitical tensions in the Middle East and tight supply dynamics, boding well for exports of liquid bulk. On the dry bulk side, the outlook also remains positive. Colombia's coal exports have ramped up in recent years, experiencing 39.6% growth in 2011. We anticipate further increases in 2012, as Xstrata's planned US Dollar 1.3bn investment into the Cerrejón coal mine by 2015 will help boost production.
Given Colombia's still-substantial infrastructure deficit, we expect investment into infrastructure and freight transport related to the export segment will to continue to grow in 2012. This comes as both the government and private industry players look to decrease supply chain inefficiencies and increase the country's export capacity from both the Caribbean and Pacific coasts.

Headline Market Data
- The Port of Cartagena will see total tonnage volume increase by 9% to 11.98mn tonnes in 2012. - Container traffic at the port will rise by 12% to 1.90mn twenty-foot equivalent units (TEUs). - Volume at the Pacific port of Buenaventura will be up by a more restrained 3.49% to 9.5mn tonnes, while container traffic will rise 11.6% to reach 531,805TEUs.

Key Market Trends
Growing Colombian O&G Exports To Boost Volumes At Puerto Bahía BMI believes the construction of a new oil and gas-focused port in Colombia is good news for its shipping and freight transport segment, which has struggled to handle increasing volumes as the country's extractive-industry boom continues. We expect Colombia's oil and gas exports to continue rising steadily during our projection period, ensuring there will be plenty of volume to supply the new facility.
Magdalena River Set For Increased Investment, Driven By Colombia's Mining Boom BMI believes there is upside potential for freight volumes on Colombia's main inland waterway, the Magdalena River, on the back of plans to use the river as an alternative to roads to transport goods from the country's central region to the coast. Given that Colombia is in the middle of a mining boom, BMI expects the river to become an important route for exports to the country's Caribbean coast.

Key

Risks to Outlook

For Q312, the main risk to our positive outlook for Colombia remains the possibility of a hard landing for China, which we expect to take up the shortfall as US imports of Colombian coal decrease. A severe slowdown in the country would kill Chinese demand for raw materials such as iron ore and coal, leaving Colombia to look elsewhere for an export industry . We believe Colombia is set to benefit from its free trade agreement (FTA) with the US. The country is already in desperate need for improved transport infrastructure to export its coal reserves, and since this FTA is likely to increase US imports it should bring with it some much-needed investment into Colombia's port infrastructure.

Maritime Transport Industry in Colombia

Executive Summary . 5
Industry SWOT Analysis . 7
Colombia Shipping SWOT . 7
Colombia Political Environment and Risk Analysis .. 8
Colombia Economic Environment and Risk Analysis ... 8
Colombia Business Environment SWOT 9
World Overview – Container Shipping 10
Executive Summary: Rate Decline Risk, Threat Of Another Year Of Losses 10
Slowing Demand A Major Threat To Freight Rates . 11
Carriers Thinking Outside Box On Overcapacity, Can Rate War Be Avoided? ... 17
Lines Must Tackle High Bunker Prices To Avoid Impact On 2012 Bottom Line .. 22
Evergreen's Order Raises Questions For Future Of Box Fleet Expansions . 25
World Overview – Dry Bulk Shipping .. 31
Executive Summary: Rates Struggling To Recover From 25-Year Low ... 31
Bleak Demand Outlook Gives Cause For Concern .. 32
Lines Withhold Payments As Shipping Struggles In Depressed Industry ... 34
Vale's Valemax Woes Continue, Vessel Values And Demand Plunging ... 36
Orders Continue As Lines Take Advantage Of Bargain Basement Prices 40
Record Dry Bulk Scrapping Levels No Match For World Fleet .. 43
World Overview – Liquid Bulk Shipping . 45
Executive Summary: Bearish View Maintained Despite Market Optimism 45
Will Increased Asian Crude Imports Offset Excess Tonnage? . 46
More Pain For US Tanker Operators Despite Investor Confidence 50
2012 Political Impact On Crude Oil Shipping Emanating From Iran . 52
Tanker Operators Scrap In Desperate Attempt To Shore Up Rates . 56
Tanker Pools To Grow As Operators Seek Safety In Numbers . 58
Industry Trends And Developments 60
Colombia Container Shipping Industry Overview . 63

Market Projection ... 68
Port Of Buenaventura .. 68
The Port Of Cartagena 70
Data : Colombia's Major Port Data, from 2009 to 2016 . 72
Trade ... 72
Data : Colombia's Trade Overview, from 2009 to 2016 .. 72
Data : Colombia's Key Trade Indicators, from 2009 to 2016 (US$mn) ... 73
Data : Colombia's Main Import Partners, from 2002 to 2009 (US$mn) .. 74
Data : Colombia's Main Export Partners, from 2002 to 2009 (US$mn) .. 74
Company Profiles ... 75
Teekay .. 75
Maersk Line . 79
Mediterranean Shipping Firms (MSC) ... 85
CMA CGM ... 89
COSCO Container Lines Firms Limited (COSCON).. 94
Hapag-Lloyd 99
Evergreen Line ...103
APL .107
China Shipping Container Line (CSCL) .113
Hanjin Shipping (Container Operations) 118
Mitsui OSK Lines (MOL) (Container).122
Country Snapshot: Colombia Demographic Data 127
Data : Colombia's Population By Age Group, 1990-2020 ('000) 128
Data : Colombia's Population By Age Group, 1990-2020 (% of total) ...129
Data : Colombia's Key Population Ratios, 1990-2020 ...130
Data : Colombia's Rural And Urban Population, 1990-2020 .130