Business Monitor International


Kenya Freight Transport Report

Published 15 January 2014

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Kenya Freight Transport Report

An accelerating domestic economy and rising demand in key export markets will cause Kenya's current account deficit to gradually narrow over the coming years. We predict that the country's current account shortfall will shrink from the 8.3% of GDP in 2014 to 5.6% in 2018. The key driver of Kenya's current account shortfall is the country's gaping trade deficit, which is driven by high demand for oil, manufactured goods and consumer products. This will provide some comfort for the Kenyan freight industry.

This wide trade deficit is partially offset by surpluses in the service and transfer accounts. Kenya's service exports are among the largest in the region, and reflect the earnings of the country's large travel and tourism sector. Despite a series of set-backs in 2013 (including an airport fire and the September Westgate attack), BMI holds a positive long-term view of the industry, and believes that it will continue to bring in needed foreign exchange.

There are three key reasons why BMI believes that Kenya's current account deficit will narrow over the coming years: strong export growth, lower energy prices, and increased economic diversification. These factors will all reduce the trade deficit, addressing the key cause of a current account shortfall.

Kenya's position as the economic hub of East Africa means that the economy is highly exposed to increased demand in its fast-growing region. BMI expects that real GDP growth in Uganda and Tanzania will remain highly elevated over the coming years due to surging investment and the expansion of the resource sector. This will boost demand for Kenyan goods and services.

Air freight is set to be the outperformer in terms of the Kenyan freight mix in 2014 with healthy year-on-year (y-o-y) gains expected (8.78%). While the fire at Jomo Kenyatta International did present some risk, in large part due to the cause of the blaze being unknown at first (with terrorist attack not ruled out), the BBC reported in October that the...

Table of Contents

BMI Industry View
7
SWOT
10
Freight Transport
10
Political
12
Economic
14
Business Environment
15
Industry Forecast
17
Macroeconomic Outlook
17
Air Freight
17
Table: 1: Air Freight, 2011-2018
18
Maritime Freight
18
Table: 2: Maritime Freight, 2011-2018
18
Rail Freight
18
Table: 3: Rail Freight, 2011-2018
19
Trade
19
Table: 4: Trade Overview, 2011-2018
19
Table: 5: Key Trade Indicators, 2011-2018
20
Table: 6: Top Import Destinations, US$mn, 2007-2012
20
Table: 7: Main Export Partners, 2007-2012
21
Market Overview
22
Industry Trends And Developments
31
Air Freight
31
Rail Freight
32
Road Freight
35
Maritime Freight
38
Company Profile
41
Kenya Airways Cargo (KQ Cargo)
41
Delmas
45
Political Outlook
48
Domestic Politics
48
Long-Term Political Outlook
50
Table: Kenya Political Overview
53
Oil Price Outlook
55
Global Oil Product Price Outlook
55
Methodology
55
Crude Price Forecasts
55
Table: BMI's Oil Price Forecasts, Average Price (US$/bbl)
56
Variance Across Product Markets
56
Narrower US Market Crude-Product Spreads
59
Weak Demand Persists
60
Risks To Outlook
61
Table: BMI's Refined Products Forecasts, US$/bbl
61
Supply: Supported By Global Refining Capacity
62
Naphtha: US Gas Hits Demand
66
Gasoline And Gasoil/Diesel: Subsidies & Fuel Efficiency Cap Upward Movement
68
Jet Fuel: Limited Upward Movement
70
Table: Total Air Freight And Passenger Volumes
72
Bunker Fuels: Sulphur Control To Hit Rotterdam Hardest
72
Macroeconomic Forecasts
76
Economic Outlook
76
Table: Kenya - GDP By Expenditure
83
Demographic Forecast
86
Kenya Demographic Outlook
86
Table: Kenya's Population By Age Group, 1990-2020 ('000)
87
Table: Kenya's Population By Age Group, 1990-2020 (% of total)
89
Table: Kenya's Key Population Ratios, 1990-2020
90
Table: Kenya's Rural And Urban Population, 1990-2020
90
Methodology
91
Industry Forecast Methodology
91
Sector-Specific Methodology
92
Sources
93

The Kenya Freight Transport Report has been researched at source, and features latest-available data covering commercial transport and logistics by road, rail, air and water; industry forecasts, company rankings covering leading national and multinational operators; and analysis of latest industry trends, opportunities, projects and regulatory changes.

Business Monitor International (BMI)'s Kenya Freight Transport Report provides industry professionals and strategists, sector analysts, investors, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the Kenyan freight transport and logistics industry.

Key Benefits

  • Benchmark BMI's independent freight transport industry forecasts on Kenya to test other views - a key input for successful budgetary and planning in the strategic freight transport market.
  • Target business opportunities and risks in the Kenyan freight transport sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in Kenya.
  • Assess the activities, strategy and market position of your competitors, partners and clients via our Company Profiles (inc. SWOTs, KPIs, and latest activity).

Coverage

BMI Industry View

Summary of BMI's key industry forecasts, views and trend analysis covering freight transport and logistics, regulatory changes, major investments and projects and significant national and multinational company developments.

Industry SWOT Analysis

Analysis of the major Strengths, Weaknesses, Opportunities and Threats within the freight sector and within the broader political, economic and business environment.

Industry Trends And Developments

Analysis of latest projects across the freight transport sector (road, rail, air, sea and logistics) including market overview which provides an outline of the key elements driving development.

BMI Industry Forecasts

Historic data series and forecasts to end-2018 for all key industry and macroeconomic indicators, supported by explicit assumptions, plus analysis of key downside risks to the main forecast, including:

Transport Sector: Sector Value (US$bn); sector real growth (%); employment (`000); total freight carried by road, rail, inland waterways, maritime, air and pipeline (mn tonnes-km/mn tonnes)

Trade: Exports and imports (US$mn) by category of goods (manufactured goods, food, chemicals etc.); top-5 import and export trade partners (US$mn); imports/exports to each global region (US$mn)

Port Data: Throughput (`000 tonnes) and container throughput (TEU) for all major ports in the state

Oil Products Prices: Price forecasts for gasoline and aviation fuel (US$/bbl) at all major global energy trading hubs

Economic Indicators: Nominal GDP (US$bn); real GDP growth (%); GDP per capita (US$); industrial production (%); unemployment (%)

Market Overview

Details of the freight infrastructure in each state by segment (road, rail, air, water and pipelines). Full analysis of the competitive landscape within each segment.

Political Outlook

The freight reports contain a chapter detailing the political outlook of a given region, examining the domestic politics, long-term outlook and foreign policy, and assessing the impact this could have on freight and transport businesses.

Company Profiles

Examines the short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI's industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape to generate Company SWOT (Strengths, Weaknesses, Opportunities and Threats) analyses. The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.

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Testimonials

'An essential, multi-faceted research tool. BMI’s thorough understanding of the major market players enables an informed – and informative – review of the sector’s actual performance, together with useful insights into current industry issues, which are topped-off with detailed and invaluable forecasts of industry and macroeconomic trends.’

Senior Research Analyst, ABC International Bank plc