LOCAL carriers expect freight business in the next five years to be rosy, thanks to the robust mining and construction businesses.
“The local shipping industry is starting to get interesting. It has started to get rosy. The freight business is expected to grow about 10-15% this year and doubling by 2010 while the passage business has likewise started to pick up,” said an official of the Philippine Liners and Shippers Association (PLSA), the largest organization of local freight and passage service providers.
“I think we already hit the bottom of the business slowdown,” the official, who requested anonymity, said.
“The freight business will continue to grow. It is again arguably the biggest growth area for the shipping industry this year while the passage sector is expected to benefit from the added purchasing power of the public due to the strong appreciation of the peso,” she said.
This year, sea freight traffic is estimated to grow 10% to about 53 million metric tons (mmt), and to about 58 mmt to 60 mmt next year. It is also forecast to post an average 3.4% annual growth rate from 2010 to 2015.
Earlier, the Japan International Cooperation Agency (JICA) projected steady growth in the Philippines’ freight sector until 2015.
According to a JICA report, domestic sea freight has been steadily expanding in volume from about 26 mmt in 1988 to 48 mmt in 2003.
In the last five years, however, growth has been weak at only 1.6% per annum. Sea traffic consists of 25% liquid bulk, 15% dry bulk, 22% container traffic and 26% break bulk. In the last few years, there has been a slow down in liquid bulk and break bulk traffic. Only container traffic has been increasing at 4.7% per annum since 1999.
