Agility Emerging Markets- Logistics- Index 2016

Agility Emerging Markets Logistics Index2016

Agility Emerging Markets Logistics Index 2016

www.transportintelligence.com

Contents

2

Section 1: The Agility Emerging Markets Logistics Index 4

Section 2: Sources 6

Section 3: Methodology 7

Section 4: Key Findings 9

EmergingMarkets:HowLogisticsExecutivesSeeThem 9

MarketsontheMove 11

TradeLanes 13

Section 5: Overview & Outlook 14

Section 6: The 2016 Agility Emerging Markets Logistics Index 18

TheTop10 18

ChangesoutsidetheTop10 20

The2016Index 23

EmergingMarketsQuadrant 34

Section 7: Emerging Market Trade Lanes 35

TradebyAir 38

TradebySea 46

Section 8: The 2016 Agility Emerging Markets Logistics Survey 54

PerceivedMajorLogisticsMarketsoftheFuture 55

FactorsbehindthePotentialEmergenceofMarkets 57

ProblemsAssociatedwithDoingBusinessinEmergingMarkets 58

SupplyChainRisk 60

LeastAttractiveEmergingLogisticsMarkets 63

ProspectsforEmergingTradeLanes 65

Contents

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Contents

VerticalSectors 66

MarketsforPotentialInvestmentovertheNextFiveYears 69

ProspectsfortheChineseEconomy 71

TheEffectsofChineseEconomicTurbulence 72

StrategiesforSub-SaharanAfrica 73

Sub-SaharanAfrica’sMostPromisingMarkets 74

DriversbehindtheEmergenceofSub-SaharanAfrica’sEmergingMarkets 75

ProspectsfortheBRICS 77

BarrierstoGrowthinBrazil 78

TheFutureofGrowthinIndia 79

Expectationsfor2016 80

MostSignificantDriversintheGlobalEconomy 81

ProspectsforEmergingMarketGrowth 82

Section 9: About Agility and Transport Intelligence 83




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The Agility Emerging Markets Logistics Index

Essa Al-Saleh, CEO & President Agility Global Integrated Logistics (GIL)

NationalReviewmagazinerecentlynotedthatforthefirst

timeinhistorylessthan10%oftheworld’spopulation

livesinextremepoverty,currentlydefinedassubsistence

on$1.90adayorless.Forcontext,in1990,37.1%of

theworld’speoplelivedinextremepoverty.Emerging

marketswere–andstillare–hometothemostofthe

world’spoor,butthepaceofchangeandprogressin

thosecountrieshasbeennothingshortofbreathtaking

overthepast25years.That’simportanttoremember

afterayearlike2015,whichwascharacterizedby

fallingtradevolumes,depressedcommoditypricesand

geopoliticalinstabilitythatcombinedtoslowgrowth

inemerginganddevelopedmarketsalike.Emerging

marketsgrowth,4.6%in2014,slowedto4.2%in2015,

accordingtotheInternationalMonetaryFund.TheIMF

forecastsapickup–to4.7%–in2016.

In2015,thelonebrightspotamongthelargestemerging

markets,theso-calledBRICS,wasIndia.India,which

tookinitialstepstoenactlong-promisedreformssuchas

taxsimplificationandregulatorystreamlining,overtook

John Manners-Bell, CEO Transport Intelligence

Theworld’seconomyisstillrivenbyinstability,as

marketscometotermswiththehangoverleftbythe

globalfinancialcrisisof2008-9andthesubsequent

downturnwhichencompassedEurozoneeconomies.

Emergingmarketshavenotbeenimmunetotheworld’s

economicmalaise,withChinainparticulardowngrading

itseconomicgrowthprospectsascommodityprices

slumpandexportsstagnate.WithChinasuffering,its

tradingpartnersacrosstheregionarealsoaffected.On

topofthisastrongerUSeconomyhasmeantaflightof

capitalfromEasttoWest,whichhasledmanyemerging

countriestoincreasetheirinterestrates,dampening

domesticgrowthfurther.

Theunderlyingeconomicproblemshavehad

consequencesfortheinternationalfreightsector.Air

andseavolumeshavebeenweakduetotheslowdown

ininternationaltrade.ShippinglineMaersknowexpects

globaldemandforseabornecontainertransportation

toincreaseby1-3%in2015,downfromitsprevious

expectationof3-5%announcedinitsQ12015report.

One




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Chinaastheworld’sfastest-growingeconomy.Russia

andBrazilexperiencedsharpcontractions.Asagroup,

countriesinSub-SaharanAfricalostmomentumafter

severalyearsofstronggrowth,despitevitalityinEthiopia,

IvoryCoastandTanzania.Theyear-longpersistence

ofcheapenergypricesamountedtoa$450billion-

plustransferofwealthfromproducingcountriesto

consumingeconomies,anenormousboontoconsumers.

Butlowpricesalsostalledambitiousenergyprojects,

particularlyinAfrica,whereoilandgasfindshavethe

potentialtoacceleratedevelopmentandbringdramatic

improvementsinlivingstandards.

Theglobaleconomyrodethecoattailsofemerging

marketsgrowthforadecadeormoreaheadofthe

2008crisis.Withtheslowdowningrowthin2015,some

economistsexpressedconcernthatemergingmarkets,

52%ofglobalGDPinpurchasingpowerterms,could

becomeadragontheworldeconomy.Thatdoesnot

havetobethecase.Billionsofpeoplelivinginemerging

marketscountriescontinuetoworktheirwayinto

theglobalmiddleclass.Theirdesireforbetterjobs,

healthcare,high-qualityeducationandelevatedliving

standardsshouldcontinuetopropelgrowthinemerging

markets,especiallythosecountrieswithyounger

populations.Wherepolicymakerstakestepstoenhance

tradeandimprovethebusinessclimate–streamlining

regulations,protectinginvestors,attackingcorruption,

strengtheningcontractlawandpropertyrights,easing

capitalrestrictions,andnurturingentrepreneursand

smallbusiness–prosperitywilltakerootandemerging

marketscountrieswillbevital,durablelinksinregional

andglobalvaluechains.

Perhapsmostworryinglyofall,theOECD’slatest

economicoutlookwarnsthatglobaltradegrowthwillbe

just2%in2015,downfrom3.4%in2014.

However,itisnotallbadnews.Chinaismuchmore

resilientthanmanywouldbelieve.Ithastheeconomic

resourcestobeabletorideoutthetransientproblems

whichitcurrentlyfaces.Althoughtherewillbea

slowdowningrowth,thechancesofafull-scalerecession

seemoverblown.

Otheremergingmarketsmaynotbesolucky.Brazil,for

example,isnotnearlyasrobustasChinaandissuffering

substantiallyfromaneconomywhichhasnevermaterially

diversifiedfromitsrelianceonnaturalresources.

Transportinfrastructureisweak,againincontrastwith

China,andbusinessishamstrungbycorruptionand

bureaucracy.

Smalleremergingmarketsalsohavesystemicfiscal

problems.Malaysia,forexample,issufferingfromsevere

indebtedness.Russiaisstrugglingduetolowcommodity

pricesandtheeffectsoftradesanctionsimposedby

theEUandUS,andTurkeyhashighinflationandlarge

foreigndebts.

However,lookingtothelongerterm,thingsarenotasbad

astheymayatfirstseem.Althoughlowoilpriceshavea

detrimentalimpactonmanyproducersinthedeveloping

world,theyalsospurgrowthintheWest.According

totheIMF,worldGDPwillactuallygrowby3.6%in

2016.Thisissignificant,albeitlowerthanbeforethe

2008financialcrisis.Indiaisexpectedtogrowby7.3%,

takingoverthemantlefromChinaastheworld’sfastest

growinglargeeconomy,helpedbythefactthatitisa

consumerratherthanproducerofoil.Mexicoisalsoina

muchbetterpositionthanmanyotheremergingmarkets,

notleastbecauseofitsstrongtieswiththeUSandthe

benefitsitisgainingfromthenear-sourcingstrategiesof

USmanufacturers.

Morethanever,itseems,investorsinemergingmarkets

havetobediscerning.WhenTiestablishedtheAgility

EmergingMarketsLogisticsIndexin2010,itspurpose

wastodifferentiatebetweencountrieswhichofferedthe

bestopportunitiesduetotheirfarsightednessintermsof

infrastructureinvestment,security,growthprospectsand

businessenvironment,andthosewhichlaggedbehind.

ThebasisfortheIndexremainsasrelevantnowasitwas

then,providingclarityinaconfusingandcomplexworld.




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Sources

TheAgilityEmergingMarketsLogisticsIndexhasthree

maincomponents–theIndexcountryrankings,major

tradelanesbyvolumeandmodeoftransport,anda

surveyoftradeandlogisticsprofessionals.

DatafortheIndexcountryrankingscomesfromthe

InternationalMonetaryFund,OrganizationofEconomic

CooperationandDevelopment,WorldBank,government

statisticalagencies,UnitedNationsandUNagencies,

WorldEconomicForum,InternationalTradeCentreand

InternationalAirTransportAssociation.

TradelanedatacomesfromtheUnitedStatesCensus

BureauandEurostat.

Two




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Methodology

Definition of ‘Emerging Markets’

Theterm‘emergingmarkets’wasfirstcoinedbythe

WorldBank’sInternationalFinanceCorporation(IFC)in

1981.Accordingtoitsdefinition,anemergingmarketis

acountrymakinganefforttoimproveitseconomywith

theaimofreachingthesamelevelofsophisticationas

nationsdefinedas‘developed’.Anemergingmarketis

furthercharacterisedbytheIFCasmeetingatleastone

ofthetwofollowingcriteria:

1.Itisalowormiddleincomeeconomy,asdefinedby

theWorldBank

2.Itsinvestablemarketcapitalisation(IMC)islowrelative

toitsmostrecentGrossDomesticProduct(GDP).

The Agility Emerging Markets Logistics Index

TheAgilityEmergingMarketsLogisticsIndexusesthree

metricstoassessandrank45emergingmarkets.The

metricsmeasurethecountries’:

•Marketsizeandgrowthattractiveness(50%ofoverall

Indexscore)

•Marketcompatibility(25%ofscore)

•Marketconnectedness(25%ofscore).

Market size and growth attractiveness(MSGA)rates

acountry’seconomicoutput,itsprojectedgrowthrate,

financialstabilityandpopulationsize.

Market compatibilityratesemergingmarketsaccording

totheirmarketaccessibilityandbusinessregulation,

foreigndirectinvestment(FDI),marketriskandsecurity

threats,aswellastheleveloflikelydemandforlogistics

servicesbasedonthecountry’seconomicdevelopment.

Marketcompatibilityisablendof:

•Acountry’sdevelopmentthroughtheimportanceofits

servicesector–indicativeofthelevelofoutsourcingof

logisticsservices

Thre

e




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•Urbanisationofpopulation–adriverofmanufacturers’

centraliseddistributionstrategiesandthelikely

consolidationofretailing

•Distributionofwealththroughoutthepopulation–

indicativeofthewidespreadneedforhighervalue

goodsoftenproducedbyinternationalmanufacturers,

asmeasuredbytheGiniIndex

•ForeignDirectInvestment(FDI)–anindicatorofthe

penetrationofaneconomybyinternationalcompanies

•Marketaccessibility–howeasyitisforforeign

companiestoenterthemarketanddealwithexisting

bureaucracyandregulation

•Security–thismeasurestherisktocompanies’

operationsfromthreatssuchastheft,piracyand

terrorism.

Market connectednessassessesacountry’sdomestic

andinternationaltransportinfrastructureandhowwell

theyconnect.

Specifically,thisinvolves:

•Thefrequencyandrangeofdestinationsofitsliner

shippingconnections

•Thelevelofairportinfrastructurerelativetothemarket’s

size

•Aratingofitsoveralltransportinfrastructure

•Aratingoftheefficiencyofitscustomsandborder

controls.

The Agility Emerging Markets Logistics Index for Countries with GDP more/less than US$300bn

GDPismeasuredincurrentUS$.GDPdatahasbeen

obtainedfromtheWorldBank.

Trade Lanes

Thetradelanesectionmeasuresthevolumeofgoods

shippedbyairandseabetweentheemergingmarkets

includedintheIndexandtheUS/EU.Thetradelane

sectionincludestwoparts:

1. Top 10 Trade Lanes – Air and Sea, Import/Export

Alistoftradelaneswiththehighestvolumes,as

measuredbytons,splitbyairandsea,andbyimport

andexport(fromemergingmarketstotheEU/USandto

emergingmarketsfromtheEU/US).

2. Fastest Growing Trade Lanes – Air and Sea, Import/Export

Forairandsea,byimportsandexports,thefastest25

growingtradelanesforeachcasehavebeenranked

bytheirgrowthin2015.Inaddition,anindexhasbeen

calculatedwithabaseyearof2005toofferalong-term

perspectiveoneachtradelane’sperformance.

2005-2014dataare‘actual’figures,whereas2015data

areforecastfiguresbasedonactualmonthlydatafrom

January-August2015.Aforecastmodelwhichaccounts

forseasonalityhasbeenappliedtoestimatefull-year2015

figures.Forseafreight,tonnagerelatingtoHS2product

group27“mineralfuels,mineraloilsandproductsoftheir

distillation;bituminoussubstances;mineralwaxes”has

beensubtractedfromtotalfigures.Noproductgroups

areexcludedfromairfreightfigures.Toqualifyasoneof

the25fastestgrowingtradelanes,acertainvolumemust

bereached.Forseafreighttradelanesthisthresholdis

1milliontonnes.Forairfreight,itis10,000tonnes.This

preventsrelativelyinsignificanttradelanesenteringthe

rankings.

CAGRshavebeenusedtomeasureeachtradelane’s

performance.CAGRstandsforCompoundAnnualGrowth

Rate.Itmeasurestheconstantannualpercentagegrowth

rateofatimeseriesbetweenaparticularstartandend

point.WhileCAGRscanbeaquickandusefulwayto

analysemediumandlong-runperformance,cautionshould

betakenastheycanoftendisguisevolatility.Inspectionof

eachyear’sindexvalueovertimerevealsvolatility.




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Key Findings

Emerging Markets: How Logistics Executives See Them

Nearly 1,200 supply chain and logistics executives

worldwide shared their views on the 2016 global

economic outlook, prospects for emerging markets, key

growth drivers and trends affecting emerging markets

countries.

•Thesupplychainindustryisbracingformorevolatility

intheglobaleconomy.Alargemajorityofindustry

executives(61%)areunclearonthedirectionofthe

worldeconomyorindicatetheyexpectmoreturbulence.

TheirtoptwoconcernsareoilpricesandChina’s

economichealth.Atthesametime,most(59.4%)feel

theIMFwas“aboutright”inforecasting4.7%growthfor

emergingmarketsin2016

•Globaleconomicprospectsin2016areheavily

dependentontheUnited States,intheviewofindustry

executives.AfteroilpricesandChineseeconomic

vitality,respondentssaidthemostsignificantdriversof

theglobaleconomywillbethestrengthofthedollarand

thehealthoftheUSeconomy

•Forthefirsttime,supplychainindustryprofessionals

seeIndiaastheemergingmarketscountrywith“the

mostpotentialtogrow”asalogisticsmarketoverthe

nextfiveyears.IndiaedgedoutChina,whichwasseen

asthemarketwiththemostpotentialinpastsurveys.

Indiaalsoclimbedtwospotsto3rd,behindChina

andUAE,inthedata-drivenAgilityEmergingMarkets

LogisticsIndex.Itsrisewaspropelledbyaninitial

roundofeconomicreformsandasurgingeconomy.

Whileoptimistic,logisticsprofessionalsalsoremain

cautiousaboutIndia.Nearly42%saidIndianeedsmore

structuralreformtosustainitscurrentgrowthandmore

than21%saidthecountryneedsmorethaneconomic

reformifitistounlockitspotential

•LogisticsexecutivesareintriguedbyIran’semergence

frominternationalisolationandanticipateopportunity

andgrowthwiththephasedliftingofmosteconomic

sanctions.Inthe2016survey,Iranmovesup12spots

(from27thto15th),asapotentialmajorlogisticsmarket

overthenextfiveyears.Iranalsoleaptfrom35thto

16th,amongmarketsforpotentialinvestmentoverthe

nextfiveyears

Four




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• Brazilremainsanappealinglogisticsmarkettoalarge

percentageofindustryexecutives,againrankingas

thethirdmostattractiveemergingmarketamongthose

surveyed.Butsentimenthassouredamongsome,

whoputBrazil17thamongemergingmarketswith

theleastpotentialasamajorlogisticsmarket.Nearly

35%ofsurveyrespondentscitedpoorgovernance

asthekeybarriertoBrazil’sreturntohighergrowth

rates.Takentogether,thetopthreebarriers–poor

governance,corruptionandexcessivegovernmentdebt

–drew73.1%ofresponses,anindicationthatindustry

executivespinblameforBrazil’scurrentrecession

mainlyonthecentralgovernment

•Economicgrowthratesareagain,byfar,theleading

choiceasthe“keydriver”thatmakesacountryan

importantemergingmarket(30%).Foreigndirect

investmentwaspickedasthe2ndmostsignificantdriver

andgrowingtradevolumeswere3rd.Atthebottomofa

12-itemlistweretheabilitytobeanear-sourcingmarket,

lackofcorruptionandstrongsecurity

•Industryprofessionalsseecorruptionasthebiggest

problemassociatedwithdoingbusinessinemerging

markets,eventhoughtheydon’tconsider“lackof

corruption”tobeakeydriverthatmakesacountryan

importantemergingmarket.Thissuggeststhatindustry

professionalsunderstandthattheywillencounter

corruptioninemergingmarketsandhavestrategiesto

dealwithit

•Forthefirsttime,logisticsprofessionalsseeeconomic

shockastheleadingsupplychainriskinAsiaPacific,

reflectingconcernabouttheeffectofaslowingChinese

economyandthepotentialforarippleeffectinthe

region.Inthepast,industryprofessionalsviewed

naturaldisastersandcorruptionandthetopthreatsto

Asia’ssupplychains.Morethanhalf(54.8%)oflogistics

professionalsnowbelievetheChineseeconomyfaces

majorchallengesoverthenexttwotothreeyears.

Asignificantpercentage(38%)isreassessingits

Chinastrategy,asaresult.SluggishnessinChinahas

prompted22%tore-examinetheirbroaderemerging

marketsstrategy

•Logisticsprofessionalsbelievethatsupplychainrisks

varybyregion,althoughgovernmentinstabilityisnear

thetopofthelistinmostregions.InLatinAmerica,

corruptionremainsthetoprisk.IntheMiddleEastand

NorthAfrica,terrorismisthebiggestconcern.InSub-

SaharanAfrica,poorinfrastructuretopsthelist

•Notsurprisingly,countriesgrippedbywar,sectarian

conflict,politicalinstabilityorinternationaleconomic

sanctionswereidentifiedbysurveyrespondentsas

havingtheleastpotentialasemerginglogisticsmarkets:

Syria(1st),Iraq(2nd),Libya(4th)andIran(5th).There

werethreenotableexceptionsamongthe20countries

identifiedastheleastattractivemarkets:Ethiopia(3rd)

isridinganexportboombutisalsosufferingitsworst

droughtindecadesandfacingpowercuts.Bolivia(up

sixspotsto16th)wasjarredbytheannouncementthat

PresidentEvoMoraleswantstochangetheconstitution

inordertoseekre-electionandstayinpoweruntil2025.

Brazil(up11spotsto17th)isinthemidstofarecession

andexperiencinghighunemploymentandinflation.

PresidentDilmaRousseff,whowantstoraisetaxes

andcutspending,isentangledinamassivecorruption

scandal

•TradeflowsbetweenAsianmarketsremainthemost

promisingintheeyesoflogisticsprofessionals.Atthe

sametime,theyshowedincreasedoptimismabout

prospectsforgrowthalongotherkeyAsiantrade

routes:Asia-NorthAmerica,Asia-AfricaandAsia-

MiddleEast.SentimentaboutAsia-SouthAmericatrade

andSouthAmerica-NorthAmericatradeslippedfroma

yearago

•Industryprofessionalscontinuetoviewthebiggest

emergingmarkets(China,IndiaandBrazil)asripestfor

investmentoverthenextfiveyears.Butmanyareclearly

intriguedbyIran.Iranleapt19spotsto16th,among

marketswiththebiggestinvestmentpotential.Turkey,hit

byslowinggrowth,fallingexportsandinstabilityalongits

southernborder,droppedthreespots,to14th.Kuwait,

whichcontinuestoinchtowardsprivatisationofkey

state-ownedenterprises,climbedsevenspotsto20th




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•Inspiteofrecentgrowthandsurgingforeigninvestment,

Sub-SaharanAfricaremainstheemergingmarkets

frontier,aplacewhereonlytheboldarepreparedtodo

business.Just21.2%ofrespondentsindicatedthey

haveestablishedoperationsinSub-SaharanAfrica.

Another12.7%saidtheyareintheplanningstagesto

entermarketsthere.Morethan43%saidtheyhaveno

planstoestablishoperationsinSub-SaharanAfrica

•South AfricaandNigeria,Sub-SaharanAfrica’stwo

largesteconomies,areviewedbylogisticsprofessionals

asthemostpromisingmarkets,followedbyKenyaand

Ghana.Forthefirsttime,industryprofessionalssee

consumerspendingbyAfrica’sgrowingmiddleclass

asamoreimportantdriverofgrowththanmineraland

resourcedemand.Poorinfrastructureandcorruption

remaintheleadinginhibitorstogrowth,survey

respondentssaid.

Markets on the Move

•Volatilityintheglobaleconomywasmirroredinthe2016

AgilityEmergingMarketsLogisticsIndex.Eightofthe

top10emergingmarketseconomiesshiftedplaces.

Chinaremainstheleadingmarketbyalargemargin,in

spiteofthefactthatitseconomyisslowing

•Amongthetop10emergingmarkets,thecountries

takingstepstodiversifyandenacteconomicand

businessreform–UAE(2nd),India(3rd)andMalaysia

(4th)–leapfroggedthecommodity-dependent

economiesofSaudi Arabia(5th),Brazil(6th)and

Indonesia(7th),allofwhichslidthreespots

• Nigeria(17th)andEgypt(22nd)bothjumped10

spots,thelargestimprovementbyanycountrysince

theIndexwasfirstpublishedin2010.Inthecaseof

Nigeria,businessesandinvestorshavebeguntogeta

truerpictureofitsperformanceandpotentialwiththe

recalibrationofitsnationaleconomicstatistics.Ayear

ago,logisticsprofessionalsindicatedtheyweregrowing

moreoptimisticaboutEgypt,eventhoughthecountry

slippedfourspotsinthe2015Index.Inthe2016Index,

Egypt’sperformancehascaughtupwithsentiment,the

resultoffaster-than-expectedgrowthandanimproving

businessclimate.Algeria–upfourplacesto30th–

wastheotherbrightspotinNorthAfrica

•Byfar,theemergingmarketsbestbusinessclimate–or

marketcompatibility–isfoundinUAE.Atthesame

time,theUAEboaststhebest“connectedness”–a

gaugeofinfrastructureandtransportconnections.As

aresult,UAEranksastheworld’s2ndmostpromising

emergingmarket,eventhoughitseconomyisdwarfed

bythatofChina(25timeslarger),India(fivetimeslarger)

andBrazil(sixtimeslarger)

•Amongthesmalleremergingmarketseconomies

(lessthan$300bnGDP),Chilecontinuestobethe

topperformer,basedonitsstrongbusinessclimate,

infrastructureandtransportconnections.Qatarand

Omanscorehighestamongsmallereconomiesfortheir

businessenvironment

•ThepicturewasgloomierinLatinAmerica.SeveralLatin

countriesdroppedsharplyintheIndex.Inadditionto

Brazil(whichfellthreespotsto6th),Uruguaydropped

fourspotsto24th,Colombiaslippedthreespotsto25th,

Peruplungedfiveplacesto28thandArgentinadropped

fivespotsto31st.Venezuelacontinuesitseconomic

freefall.Itdroppedthreespotsto39th.Twenty-three

ofthe29countrieswithsmallereconomiesoutrank

VenezuelaintheIndex.ElsewhereinLatinAmerica,only

Paraguay(upthreeto35th)andBolivia(upthreeto

38th)improvedtheirIndexrankingssignificantly

• Russia,increasinglyisolatedeconomicallysinceit

beganbackingrebelsineasternUkraine,fellfrom7thto

9thintheIndex.Ukrainefellfourspotsto34th.




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BIGGEST MOVERS1 Egypt2 Nigeria3 Algeria4 Malaysia5 UAE6 Bolivia7 Paraguay8 India9 Pakistan10 Sri Lanka

UPBIGGEST MOVERS1 Argentina2 Peru3 Jordan4 Ukraine5 Uruguay6 Brazil7 Indonesia8 Morocco9 Saudi Arabia10 Venezuela

DOWN

1

2

3

4

5

67

8

9

10

8

7

2

6

51

10

9

4

3

Source: Transport Intelligence

Markets on the Move




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Trade Lanes

Air Freight to Emerging Markets

Thebusiestemergingmarketsairfreighttradelanes

originatingintheEUorUStendtoconnecttolarger

marketsintheIndex:China,UAE,India,SaudiArabia,

Turkey,Mexico,BrazilandSouthAfrica.Volumealong

theselanesgrewbydouble-digitmarginsinmanycases.

TheexceptionswereEU-Brazil(down1.5%)andUS-

Brazil(down14.4%).

Theninefastest-growingairlanesinvolveEUorigins.

ThetopfivewereEU-Indonesia(up72.8%),EU-Peru(up

61.6%),EU-Ethiopia(up58.6%),EU-Thailand(up52.9%)

andEU-Malaysia(up42.1%).

EUairshipmentstoemergingmarketsareonpaceto

growby16.5%forfull-year2015,butUSairshipmentsto

thosesamemarketslooksettoshrinkby1.6%.

Air Freight from Emerging Markets

Flowingintheotherdirection–fromemergingmarketsto

theEUandUS–thepicturewasmixed.Alongthebusiest

airlane,China-USairfreightgrew12.6%.Volumeon

the2ndlane–China-EU–fell17.3%.Thelargestgains

amongtop10laneswereVietnam-US(up39.2%)and

Ethiopia-EU(up55.2%).

Ocean Freight to Emerging Markets

Inoceanfreight,thelargestlaneconnectsUSoriginswith

destinationsinChina.Tradealongthatlanefell6%.The

EU-Chinaoceanlaneexperienceda9.4%increasein

volume.Elsewhere,EUoceanshipmentstoSaudiArabia

(up20%)andUSshipmentstoColombia(up11.7%)

showedthemostgrowthamongthetop10lanesinvolving

EU/USoriginsandemergingmarketsdestinations.Along

laneswithlessvolume,thebiggestincreasescamein

EU-Bangladesh(up107.4%),US-Pakistan(up76.6%),

EU-Oman(up59.4%)andEU-Kenya(up57.4%).

Ocean Freight from Emerging Markets

Alongthetopoceanlanescarryingemergingmarkets

freighttotheEUandUS,growthwasmoremodest.The

biggestgaincameinthebusiestlane:China-USvolume

wasup7.4%.

Anumberoflaneslinkingemergingmarketswiththe

EUandUSgrewspectacularly,butmostgainscameoff

relativelysmallbasevolumes:Uruguay-EU(up56.8%),

Oman-US(up56.7%)andTurkey-US(up30.2%).

EUoceanfreightfromemergingmarketsoriginswasflat

(upamere0.8%).USoceanvolumefromIndexcountries

grew4.3%.




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Overview & Outlook

Emergingmarketshavebecomeincreasinglyimportant

totheworld’seconomy,takingonrolesasmanufacturing

hubs,outsourcingdestinations,transhipmentpoints

betweenproductionandconsumption,andforsome,

aspotentialconsumermarketshometomillionsof

consumersenteringthemiddleclasseachyear.These

rolesbecamevastlymoresignificantfollowingthefinancial

crisisin2008,whichhighlightedthealreadycompelling

commercialopportunitiesandcostadvantagesoffered

tomanufacturers,retailersandlogisticsserviceproviders

inavastarrayofindustriesandsub-sectors.Asweenter

2016,however,apotentmixofeconomicheadwinds,

marketturbulence,andsocialandpoliticalpressureshave

threatenedthecapacityofmanyoftheworld’shighgrowth,

highpotentialemergingmarketstofulfiltheirpromise.

Theyearaheadwillbringwithitnewfounduncertainty

andcomplexityinemergingmarkets,andthoseoperating

inmanyofthesehighlypromisingmarketswillhaveto

navigateathirdphaseofthewiderglobaleconomic

traumathatfirstappearedin2008.AsAndyHaldane,

ChiefEconomistattheBankofEngland,explained,

phaseonecamein2007-2008,whenbankslenttoo

muchwithouttheprotectionofsufficientcollateral.Phase

twooccurredduring2011-2012,withtherealisation

thatlendingintheEurozonewasofferedonthefalse

assumptionthatallcountrieshadequalcapacitytorepay,

culminatingwithmassiveroundsofquantitativeeasing.

Now,weareinwhatcanbecharacterisedasthethird

phase:theneedtoadjusttoaneraoflowertradegrowth,

loweroilandcommodityprices,andaloomingendto

cheapcreditproppinguptheglobaleconomy.

Whileactsoneandtwooftheglobaleconomicturmoil

ledtomanypainfulmoderationsandadjustmentsin

developednations,theybroughtaboutaboomperiodfor

emergingmarkets.China’seconomicoutput,forexample,

totalled$4.56trillionin2008,accordingtoWorldBank

figures.By2014,thatfigurehadskyrocketed127%to

$10.36trillion.Itisgrowthonthisscalethathasproven

soattractivetoinvestors,butaswemoveinto2016,

thetwodecadesofspectaculargrowththatpropelled

Chinatobecometheworld’ssecondlargesteconomy

alreadyseemlikeadistantmemory.Whilethecountry

lookstoreorientitseconomytoplacedomesticdemand

andconsumermarketsatthecentreofitsnextstageof

development,emergingmarketsthatgearedtheirown

developmenttowardsservingChinesedemandforparts,

componentsandcommoditiesmustalsoadjust.

Five




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15

LowerChinesedemandissignificantforanumberof

reasons,notleastbecauseitlowersthepriceofgoods

andmaterialsthatexport-orientedemergingmarketssell.

Forthesemarkets,lowercommoditypriceshaveresulted

inlowerexportrevenues,lostjobsandcurrencyvolatility.

Onemeasureoftheextentofthecollapseinrawmaterials

pricesinthisdecadecomesfromTheEconomist’s

compositecommodity-priceindex,whichhasplunged

fromafigureofaround240nearthestartof2011,to

just140inthemiddleof2015,implyingadecreaseof

approximately40%overtheperiod.Netoilexporting

countriesareenduringparticularlydifficulttimestoo.At

theendofJune2014,theOPECBasketPriceforcrudeoil

wasaround$110.BytheNovember2015,thepricehad

sunkbelow$40,acrashofaround60%.

Emergingmarketcurrencieshaveenduredatorrid2015,

too,withsubstantialdepreciationsrecordedinalarge

numberofmarkets.AnalysisbytheFinancialTimes

showedthatthecurrenciesofRussia,Colombia,Brazil,

Turkey,MexicoandChilehavelostbetween20%and50%

oftheirvalueagainsttheUSdollar,sinceJune2014.This

hasoccurredforvariousreasons,withtheexpectation

ofaUSinterestratehikeandChina’sdecisiontodevalue

theyuancompoundingtheeffectsofreductionsinthe

quantitydemandedandpricesofcommodities,prime

amongstthem.Thefallingvalueofemergingmarket

currencieshasbeenespeciallydamagingbecause

ratherthanreapportioningafixedleveloftradebetween

winnersandlosers,theFT’sresearchsuggestscurrency

weaknesshasunderminedimports,asonewouldexpect,

buthasnothadanybeneficialimpactonexportvolumes.

Additionally,thefallinthevalueofcurrencyhasmeantthat

foreign-denominateddebtthatemergingmarketsholdhas

suddenlybecomemoreexpensivetoservice.

Debtheldinemergingmarketsisalsopresentinghigh

levelsofrisk.Indeed,theseverityoftheemergingmarket

debtproblemisdifficulttocomprehend.TheIMF’s

October2015GlobalFinancialStabilityReportwarnedthat

corporatedebtofnon-financialfirmsinmajoremerging

marketshasmorethanquadrupled(from$4trilliontoover

$18trillion)from2004to2014,aperiodwhichalsosaw

averageemergingmarketcorporatedebt-to-GDPratios

increaseby26percentagepoints.Suchanexpansion

ofdebtisnotsurprisinggivengrowthinemerging

marketsandthelarge-scaleroundsofquantitative

easingamongstadvancedeconomiesthatcreatedvast

amountsofcheapcreditalliedwithlowinterestrates,

overtheperiod.Buttheobviousriskthispresentsis

whenglobalfinancialconditionsinevitablytighten,as

interestratesrise.Debtservicingcostswillalsorise:a

problemalreadyexacerbatedbydepreciationofemerging

marketcurrencies.Onthisbasis,theIMFhaswarnedthat

emergingmarketsshouldbraceforariseincorporate

failures.Ontheothersideofthecoin,accordingto

researchbyMoody’s,theshareofdebtheldintheworld’s

largestemergingmarketsindomesticcurrencytermshas

jumpedfromjustover50%,tojustunder75%,inthepast

15years.Thiswillhelptoprovideinsulationforexposed

emergingeconomiesandmeans,whiledebtisdefinitelya

problem,itcouldbefarworse.

Thefinalstormthatemergingmarketsareweatheringis

tumblingtradevolumegrowth.For2012to2014,import

andexportvolumegrowthinemergingmarketsaveraged

4.7%and4.2%respectivelyonasix-monthmoving

averagebasis,withrelativelylittlevariationaboveor

belowthosemarks.In2015,year-on-yeargrowthrates

havefallenwellshortofthesefigures,evendippinginto

negativeterritoryattimesinthesecondandthirdquarters

oftheyear.

But,while2015hasundoubtedlybeenachallengingyear,

forecastsfor2016aremorepositive.Themessagetotake

fromtheturmoilisthatthevolatilityandheadwindsof

thelast12monthsareproofoftheresilienceofemerging

markets.Manywillalreadyknowthatthetrendsseenin

2015arebettercharacterisedastornadosratherthan

tsunamis(theeffectsarenotbalanced,thevolatilitynot

universal)andthatrecoveryandsubsequentgrowthis

likelytobejustasuneven.Creatingvalueinthiscontext

requiresnotonlybusinessmodelsthatmanagethe

complexity,butalsomind-setsanddecision-making

modelsthatmanagethestormandempowerthosethat

understandtheuncertainty.

Asia Pacific

AsiaPacificcontinuestodominatethetopendofthe

AgilityEmergingMarketsLogisticsIndexin2016:seven




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16

oftheregion’s11emergingmarketscoveredbythis

Indexplacewithinthetop20rankingspots.Despitethe

economicturbulenceoriginatingfromChina,onlyoneof

the11–Indonesia–seesitsrankingscorefall.

Theregionremainstheengineroomofglobaleconomic

development,withitsoutputexpectedtogrow6.5%in

2015.AccordingtotheWorldBank,EastAsiawillaccount

foraround40%ofalleconomicgrowthin2015,withthe

sub-region’semergingmarketsgrowing4.6%.Theseare

positivenumbersthatindicatestrongopportunitiesin

servingbothglobalmarketsaswellasdomesticdemand

ineconomieslikeChina,SouthKoreaandSingapore.

Indeed,itmaywellbethoseseekingtofacilitateintra-Asia

tradethatfindthebestopportunities,althoughthiswon’t

bewithoutitschallenges.Thegrowthincontainerisedsea

freightvolumesonintra-Asialaneshasseenanexplosion

ofcompetitionandforcedratesdown.Despitethis,the

outlookremainspositive.MOLLinerexpectsintra-Asia

reefervolumestogrow6%,addingaround1.3mextra

TEUalonetothelanein2015.Whilemoregenerally

costsremainlow,skillsamongsttheregion’slabourforce

areincreasingandsupplychainsarebecomingmore

sophisticated,thereforecreatingopportunitiestooffer

highervalueandhighmarginservices.Growingmiddle

classesamongstAsiaPacific’semergingmarketswill

furtheraddtodemand,aswilltheincreasedfreedomand

efficiencywithwhichASEANmemberstateswillbeable

totrade.

However,whiletheemergingmarketsofAsiaPacific

seemwellplacedtotakeadvantageofsuchtrends,

therearechallengesthatmustbeovercome.Economies

acrosstheregionarehavingtorapidlyadjusttoaslowing

Chineseeconomyandsubsequentfallindemandfor,and

pricesof,commodities.Moreover,theprospectofhigher

interestratesandastrongerUSdollar,especiallyagainst

weakeneddomesticcurrencies,areathreattothosewith

highlevelsofpublicorprivatedebt.Howeffectivelythese

issues,inadditiontoloweroilpricesintheregion’snet

oilexporterssuchasMalaysia,aremanaged,willplay

alargeroleinthefortunesofmarkets,manyofwhich

willbefacingtheirsternesttestsincethe1997-98Asian

FinancialCrisis.Reformsthatemphasisesustainable,

long-termeconomicgrowthmustbebalancedwith

robusteconomicmanagementthataddressesshort-term

challenges,structuralinefficiencyandinequality.

Latin America

ForthefirsttimeeverintheAgilityEmergingMarkets

LogisticsIndex,LatinAmericahasnopresenceinthetop

fiveIndexranking,asBrazilslippedto6thandMexico’s

improvedperformancewasonlystrongenoughtosee

itreach8th.Ofthe11LatinAmericanmarketsinthe

Index,sixfellintheoverallrankings,whiletheaverage

scoreacrossthemarketsdeclined.Allthreeothermajor

regionalgroupingssawanincreaseinaveragescore.

Itshouldperhapsbenosurprisethenthatanexamination

ofLatinAmericarevealsanumberofchallenges,with

lowercommoditypricesprimaryamongstthem.Lessening

Chinesedemandfortheregion’sexportsisamajordriver

ofthelowerprices,whichisfurthercompoundedbylow

oilprices,hittingproducerslikeVenezuelahard.Inthe

early2000s,growthratesofaround5%ormorewere

commonacrosstheregion.However,lowerprices,aswell

ascorruption(estimatedtocostMexicobetween5%-9%

ofGDP),poorinfrastructure(theIMFidentifiedBrazil’s

infrastructureashinderingdomesticintegration,export

performance,productivityandmarketefficiency)and

pooreconomicmanagementinvariousmarketsacross

theregion,havedriventheregion’sgrowthratedownto

around2%-2.5%,inmorerecentyears.Indeed,theIMF

hasevengonesofarastoforecastaslightcontraction

acrosstheregionin2015,withtheregion’slargest

economies–Brazil,VenezuelaandArgentinainparticular–

weighingdownthemorebuoyanteconomies.

Duringthe2000scommodityboom,LatinAmerica’s

middleclassexpandedbynearly50%.Thiscreatedvast

consumermarkets,butthestagnationoftheregion’s

economymeansitisatriskoffallingintoamiddle-

incometrapasrisingwagessapthecompetivenessof

highervalue-addedsectors.Achroniclackofadequate

infrastructureisalsoalimitingfactorintheregion’s

capacitytopropelitselfbacktohighergrowthrates,

asisalackofcompetitivenessandproductivityinkey

industrialsectors.Therearepositives,though.Coldchain

needsaregrowinginColombia,amajorglobalexporter

offlowers,whilethewideningofthePanamaCanalwill




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createopportunitiesfortranshipmentoperationswithin

bothPanamaandsurroundingcountries.Mexico’s

proximitytotheUSanditsmembershipofNAFTAalso

boostitsprospectsastheUSgrows.

Middle East & North Africa

Forthesecondconsecutiveyear,theMENAregionis

representedin2ndsecondplaceintheoverallIndex,

althoughthistimebytheUAE.SaudiArabia,2ndinlast

year’sIndex,slipsthreeplacesto5th.The13MENA

countriesincludedintheIndexarespreadfairlyevenly

throughoutthe45rankingplaces.Thoseintheupper

half,broadlyspeaking,haveresourcewealthandpolitical

stabilityaspillarsofeconomicdevelopment.Progressing

downthelist,however,revealstheeffectsofinstabilityon

performanceasanemerginglogisticsmarket.Jordan(33rd),

Tunisia(36th),Libya(41st)andLebanon(42nd)haveall

seensignificantupheavalinrecentyears,eitherasaresult

oftheArabSpringin2011ortheongoingconflictsinSyria

andIraq.Theregion’smostimprovedperformerisalso

perhapsthemostillustrativeexampleofstability’simpact

onthefortunesofMENA’semerginglogisticsmarkets.

Egypt,havingreached18thpositionbeforetheonsetofthe

ArabSpring,slipped14positionsby2015,asstabilityand

securityacrossthecountryweakened,andconfidencein

thebusinessenvironmenteroded.In2016,though,Egypt

ranks22nd,havingrisen10placesoverthelast12months,

astheruleofGeneralAbdel-Fattahal-Sisihasrestoreda

measureofconfidenceinthemarketanditsgovernance,

evenifprogressinotherareasofsocietyisslow.

ThecontrastingperformanceofMENAcountriescreates

aclearpictureofjusthowsignificantstabilityistothe

emergenceofhighgrowth,highpotentiallogistics

markets.Whileitmaywellbefoundedonabasisof

stabilityassecurity(bothintermsofthephysicalsecurity

andeconomicstabilitythatresultfromstronginstitutions

implementingandenforcingruleoflaw),stabilityhere

alsomeanscontinuityagainstawidersetofthreatsthat

includefallingoilprices,short-termisminpolicymaking

andundiversifiedeconomies.Thosemarketsthathave

takenmeasurestoeitherreducedependenceonresource

wealthbyincentivisingactivityinotherindustrialareas,

astheUAEhas,orhaveimplementedsoundeconomic

managementduringbettertimes,suchasinSaudi

Arabia,arebestpositionedtohandlemorechallenging

conditions.Acrosstheregion,economicgrowthis

expectedtoreach2.9%in2015,solidlybelowthe4%-

5%experiencedbetween2000and2010.

Sub-Saharan Africa

JusttwomarketsfromSub-SaharanAfricareached

thetop20in2016:SouthAfricaandNigeria.Whilethis

performancehighlightsNigeria’sprogress(itmatched

Egyptbyrising10rankingpositions),aswellasthe

potentialoftheregionasalogisticsmarket,sub-Saharan

Africaisstillahighlychallengingenvironmentinwhichto

dobusinessandperformlogisticsservices.Thisismost

clearlydemonstratedbyfouroftheregion’ssixmarkets

occupyingpositionswithinthebottomninerankingspots.

Lowcommodityprices,andespeciallythelowprice

ofoil,arethreatstosub-SaharanAfrica’semerging

markets.Nigeria,amajorexporter,hasindicated

thatcapitalexpenditureswillfallaspartofarevised

budget,threateningthedevelopmentofmuchneeded

infrastructure.AndwhileSouthAfricashouldbea

benefactoroflowoilprices,energyshortagesandweak

investorconfidencehavesappeddynamismfromthe

country’seconomy.Moreover,SouthAfricaisalsofeeling

theeffectsofthefallincommodityprices,withthe

country’sminingsectorlosing23,000jobsbetweenApril

andAugust2015alone.

Toputtheregion’sacuteinfrastructurecrisisinto

perspective,theweightdraggingonproductivityinthe

worstaffectedareasinsomecountriesisestimatedto

reduceoutputbyasmuchas40%,atleastequaltothe

burdenimposedbycorruption,crimeandexcessive

bureaucracy.Providingaconsistentsupplyofpoweris

alsoasignificantchallenge.Indeed,the48countriesthat

makeuptheregionhaveapowergenerationcapacityin

linewiththatofSpain,whichhasapopulationtotalling

roughly5%ofsub-SaharanAfrica’s.Whilethese

challengesandtheireffectsareunevenacrosstheregion,

theydemonstratethescaleandsalienceoftheproblems

sub-SaharanAfrica’semergingmarketshavetosolve.




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The 2016 Agility Emerging Markets Logistics Index

The Top 10

Theupheavalcausedbytheglobalforcesthathave

shapedmuchoftheemergingmarketlandscapeover

thelast12monthsarestarklyillustratedwithinthehigh

degreeoffluctuationseeninthisyear’stop10ranking.

Forseveralyears,thosecountriesrankedattheupper

endoftheIndexlookedtobeslowlyedgingawayfrom

therestofthepack.Theywere,withintheIndexat

least,stableintheirpositionasagroupofemerging

marketsthatappearedtooffertheverybestmixof

economicrobustness,commercialopportunityand

accesstobothdomesticandglobalmarkets.Results

in2016,however,appeartoshowasplitbetweenthese

markets,highlightingthosebestpositionedtomanage

macroeconomicturbulence,andthosemorevulnerableto

globalmarketforcesandeconomicheadwinds.

Fiveofthetop10rankedmarketsmovedbyatleast

threepositions,whilejusttwo–ChinaandTurkey–are

inunchangedpositions.Comparingthefourmarketsthat

rosewiththefourthatsank,thedifferencecanlargely

beattributedtotheeffortsmadetocreatediversified

andmodernisedeconomiesoverthecourseofthe

2000s.TheUAE,whichrosefourpositionstorank2nd

overall,isaprimeexampleofthis.TheEmirates’ability

tobothunderstandandplaytoitsstrengths(primarily

itsgeographicpositionasastrategictransithublinking

eastandwest,itsvasthydrocarbonendowmentand

therevenuesgeneratedtherein,anditsabilitytocreate

abusinessenvironmenthighlyattractivetoforeign

investment)hasbeencentraltoitsabilitytoachieve

thisranking.FormanyorganisationsoperatinginUAE–

includinglogisticsandtransportationserviceprovidersas

wellasmanufacturers–anetworkof34freetradezones

offersfullforeignownership,nodirectbusinesstaxation,

noexchangecontrolsandnolimitsontherepatriation

ofcapital.Whatisthereforeanalreadyhighlyattractive

businessenvironmentisfurthercomplementedwitha

largepoolofmigrantlabour,includingbothskilledand

low-costworkers.Inshort,theUAEhastakensignificant

stepstocreatetheconditionsforlogisticsservice

providers,andtheirclients,tosucceed.

Asimilarpatternofeconomicdiversificationcanbe

seeninMalaysia,anothermarketrisingfourplaces

intheIndextoachieveitshighesteverranking.Once

amarketdominatedbytheexportofrawmaterials,

Six




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Malaysiahastransformedintoanopeneconomyand

becomealeadingglobalexporterofelectricalappliances,

partsandcomponents,aswellaspalmoil.Alsorising,

althoughfollowingastutteringattemptateconomic

diversification,isMexico,whichgainedonepositionto

rank8th.Nationalised75yearsago,Mexico’soilindustry

wasopenedtoprivateinvestmentinmid-2014,justas

oilpricesplunged.TheexpectedfloodofFDIintothe

sectorwasstymiedandthecountry,whichreliesonoil

revenueforaroundonethirdofitsoutlays,islikelytocut

publicspending,includingoninfrastructureprojects,

asaresult.Thecountry,though,isabletoperformwell

becauseithasstrengthsinotherareas.Itsmanufacturing

sectorishighlydevelopedandoffersbothproximityto

theUSandthecapacitytoproducehighvaluegoods

withlabouravailableatbroadlysimilarcoststoChina.

SuchcompetitiveadvantageshaveseenFDIinMexico’s

automotivesectortotal$20bnsince2010,withfDi

MarketsdatashowingthatMexicohasovertakenChina

intermsofmarketshareofinvestmentintheglobal

automotiveindustry.

Thefinaltop10markettoriseisIndia.Itsreturntothe

top3forthefirsttimesince2013demonstratesjusthow

uneventhecountry’sgrowthhasbeen.Attheheartof

theundulationinitsfortunessitsstiflinginefficiency,the

bestexampleofwhichcanbefoundinthedireneedfor

thestill-pendingGoodsandServicesTax(GST).India’s

currenttaxregimeeffectivelycreates29sub-national

marketswithinthecontinent-sizednationandrequires

checkpointsonmajortransportationlanesthatcreate

queuesoftrucksanddelaysintransit,whileeroding

valueandefficiency,andaddingsignificantcomplexity.

EstimatessuggestimplementationoftheGSTalone

wouldinstantlyaddupto2%toIndia’sGDPandfreeup

valuewithinsupplychainsacrossthemarket.Theneed

forsuchreformsismadeallthemorepressingbyIndia’s

potentialasalogisticsmarketprimarilybringdrivenbyits

sizeandstrengthasaconsumption-driveneconomy.

Justasexamplesofweatheringtheglobaleconomic

stormexistamongsttherisingcountries,sotoodo

examplesofvulnerabilitiesamongstthosemarketswhich

slipped.PerhapsthemostnotableoftheseisBrazil,

whichplacedoutsideofthetop3rankingpositionsforthe

firsttimeever.Ridingthecommodityboomofthe2000s

sawmillionsofBraziliansenterthemiddleclassforthe

firsttime,allowingretailersandmanufacturerstofindnew

consumers,asdisposableincomesgrew.SlidingChinese

demand,however,hasseencommoditypricesfall,which

hasresultedinjoblosses.Meanwhilebureaucracy,high

wagesandpoorqualityinfrastructurehaveleftBrazil’s

manufacturersuncompetitive.Addtothemixa$2bn

briberyscandalatstate-ownedoilcompany,Petrobras,

andBrazil’sproblemsarecompoundedbyagovernment

ingridlock,unabletoimplementmuchneededreforms

thatwouldenhanceproductivityandcompetiveness,or

moveaheadwithspendingonprojectstoremedythe

country’schronicinfrastructuredeficit.Withtheeconomy

inrecession,logisticsserviceprovidersfaceyetmore

challengesinBrazil.Russia’sfalloftwopositionsto8th

inthe2016Indexrankingscomesasitdealswithcapital

flight,adevaluationofitscurrencyandrampantinflation,

whichhaverevealedthetrueextentoftheneedforthe

countrytodecreaseitsrelianceontheenergysector.

UndersanctionsfromWesterngovernmentsfollowingits

activitiesinUkraine,economicgrowthisalmostcertainto

remainfragilesolongasacertaindegreeofuncertainty

overRussia’sgeopoliticalambitionsexists.

Alsofallingasaresultoffallingcommodityandoilprices

areSaudiArabiaandIndonesia,rankingthisyearin

5thand7thplaces,respectively.SaudiArabia’sslide

from2ndplacelastyearfollowsafallinoilprices:the

Kingdom’soil&gassectoraccountsforaround50%of

GDPand85%ofexports.Soundeconomicmanagement

duringthe2000slimiteditsfalldowntherankings,but

thereisclearevidenceofSaudiArabia’sneedtodiversify

itseconomy.Stepsarealreadybeingtakentoprivatise

infrastructureassets,shiftingtheinvestmentburden,and

therisk,bothofwhicharenowunsustainableagainsta

backdropofloweroilrevenues.Theprivatisationprocess

islikelytotouchonportsandairports,andwithnew

impetustocompeteagainstregionalrivalssuchasJebel

Ali,couldbringrenewedimpetustoinnovateanddrive

costsdownforshippersandlogisticsserviceproviders.

Indonesia,meanwhile,findsitselfhavingtodealwith

lowercommoditypricesandlowerdemandforits




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exports.Thecountry’sgovernmenthasrespondedwith

legislationdesignedtoimproveitsbusinessenvironment,

butmanyofitsshortcomingsasalogisticsmarketare

linkedtoalackofinfrastructure,poorproceduresand

systems,andcorruption.Domestically,mostkeytrunk

routesandgatewayssufferfromcongestionas,formuch

ofthelastdecade,ports,railways,airportsandroads

havebeenallbutneglected.Thisaddscosttosupply

chains,andunlessreformsandinvestmentsaremade

quicklyandeffectively,Indonesiacouldseeitselfloseout

toneighboursasOEMsseekalternativestoChina.

Thetwomarketswithunchangedrankingsbookendthe

top10thisyear.Forthefourthconsecutiveyear,Turkeyis

positionedin10th,primarilyduetoitspositionasamajor

manufacturinghubforEuropeanandUSbusinesses,

offeringcloseproximitytothegroupof28European

states.SuchFDIhascreatedjobsthatemploymillions

ofthecountry’slabourforceandempoweritsdomestic

consumers.Thecountryhasalsopositioneditselfasa

stableactorinavolatileregion,apillarofitseconomic

attractivenessitwouldbewelladvisedtopreserve.There

arechallenges,however.Lowerglobaltradeisthreatening

thejobscreatedbyforeignmanufacturersandTurkey’s

privatesectorhasborrowedheavilyindollar-denominated

debt,withrepaymentsbecomingmoreexpensiveasthe

USdollargainsstrengthandtheTurkishliralosesvalue.

Thesecondemerginglogisticsmarketwithanunchanged

rankingin2016isChinawhich,havingenteredtheIndex

in2011,hassuccessfullytakenthetopspotineachyear

since.Chinais,though,slowlyregressingtowardsthe

pack.Itsmarginofvictoryhasdecreasedineachyear

since2012anditsscoreintheoverallIndexthisyear

(7.91)representsthefirsttimeithasrecordedafigure

belowthe8.00mark.Thisisbecausegrowthinthe

Chineseeconomyisfaltering,leavingitwithsignificant

questionstoanswer.Havingbeengearedtowardsgrowth

asanexport-ledmanufacturer,China’sproductive

capacityisnowfacingreorientationinordertosmoothly

andrapidlytransitiontheeconomytoaconsumption-

leddomesticmarket.Aspartofthistransition,China

mustactquicklytodiversifyitseconomy,purgeitself

ofcorruptionandintegratethevastpopulationinrural

areasintomoreproductiveeconomicactivity.Thisis

because,putsimply,China’sinternalmarketisnotyet

abletooffsetthefallinexportvolumesquicklyenoughto

makeupfortheshortfallingrowth.Whilethelossof$5

trillionfromitsstockmarketsinJuly2015isanindication

thatconfidenceinthemarketisweakening,thereare

signsofprogress.China’sleadershiprecognisesthat

modernconsumption-driveneconomiesrunonreliable

androbustroads,railways,electricity,telecommunication

networksandinternationalgateways.Investmentsin

suchinfrastructurehavebenefittedvastswathesofthe

population,aswellasChineseindustry.Furthertargeted

infrastructureinvestmentwillbeneededtosupportthe

transitiontoadomesticconsumption-driveneconomy.

ReportsemergedinJanuary2015suggestingan

acceleratedinvestmentprocessacross300infrastructure

projectswithintheenergy,health,transportationand

miningsectors.Thissuggeststheinvestmentistaking

place,butthequestionremainsastowhetherthescale

andspeedrequiredcanbeachieved.

Changes outside the Top 10

Nigeria

Nigeriaranks17thinthe2016Index,movingup10spots

thisyear.Itsscorehasincreasedfrom4.56to5.28.

IntheMarketSizeandGrowthAttractivenesssub-index,

Nigeria’sscorehasrisenfrom6.31to7.79.Thisreflectsthe

country’s‘rebasing’ofitsGDPin2014,whichpromoted

NigeriatothelargesteconomyinAfrica,supplanting

SouthAfrica.Morespecifically,therevisedGDPfigurewas

89%higherthanpreviouslythought.Althoughsceptics

maydoubtthevalidityofthenewnumber,itwasreally

theoldfigurethatwasdubious.AssummarisedbyThe

Economist,“GDPistypicallymeasuredbyreferenceto

theshapeoftheeconomyina‘base’year.Statisticians

samplebusinessesindifferentindustriestoseehowfast

theyaregrowing.Theweighttheygivetoeachsector

dependsonitsimportancetotheeconomyinthebase

year.Astimepassesthefiguresbecomelessandless

accurate.Nigeria’soldGDPdatareliedonahopelessly

datedsnapshotofitseconomyin1990.Thenewfigures

(whichhave2010asthebaseyear)givedueweightto

fast-growingindustriessuchasmobiletelecomsandfilm-

makingthathavesprungupsincethen.”




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TherebasingalsohadasignificantimpactonNigeria’s

Compatibilityscore(3.40comparedto2.46inthe2015

Index),becausethecompositionoftheeconomyisnow

moreorientedtowardslogistics-intensivesectorsthan

previouslythought.ThisbumpedNigeriaupthreespots,

thoughitstillrankspoorlyatjust40thinthissub-index.

Egypt

Egypthasjumped10spotsintheoverallIndexranking,to

22nd.Itsscorehasrisenfrom4.38to4.99.Thisismostly

downtoitsMarketSizeandGrowthAttractivenessscore

increasingfrom4.92to6.12.Theimprovementhasbeen

drivenbysignificantupwardrevisionstoitseconomic

growthforecastsandtheoverallsizeofitseconomy

beingmoreimpressivecomparedtotherestofthepack,

thanlastyear.Post-ArabSpring,Egypthasquietlymade

animpressiverecovery.

Unsurprisingly,therehasalsobeenageneral

improvementinEgypt’sbusinessenvironmentwhich

hasseenitsCompatibilityscorerisefrom2.35to2.85,

thoughthisstillonlyranks43rd.Foreigninvestorsin

particularappeartoberegainingameasureofconfidence

inEgypt.AccordingtofDi,realforeigninvestmentin

Egypt(asmeasuredbytheextentofgreenfieldcapital

investmentprojects)pickedupstronglyin2014,witha

significantnumberoflarge-scaleinvestmentprojects

announced,whichthemselvesfollowtheredevelopment

andwideningoftheSuezCanal.Infact,Egypt’sinward

capitalinvestmentof$18bnin2014wasgreaterthanany

othercountryintheMiddleEastandAfrica.However,this

fundingwasconcentratedinjust51projects,compared

to302($13bn)intheUAEand116($4bn)inSouthAfrica.

Pakistan

Pakistanhasmoveduptwospotsinthisyear’sIndexto

23rd.Itsscorehasimprovedfrom4.77to4.99.

Thisislargelydowntoitseconomicoutlookimproving.For

example,theIMF’slatestiterationofrealGDPforecasts

to2020iscertainlymoreoptimisticthanayearago.

Credit-ratingagenciessuchasMoody’sandStandard&

Poor’shavealsobeensimilarlyupbeat.Bothimproved

theircreditratingoutlookforthecountrytopositive

fromstableinMarch2015andMay2015,respectively.

Standard&Poor’sstated:“Thepositiveoutlookreflects

ourexpectationsofPakistan’simprovedeconomicgrowth

prospects,fiscalandexternalperformance,andthe

supportiverelationshipofexternaldonorsoverthenext

12months.”Theagencyalsoraisedits2015-2017average

growthprojectionto4.6%from3.8%.

However,Pakistanstilllagsbehindseverelyinthe

CompatibilityandConnectednesssub-indices,ranking

42ndand35threspectively,withPakistan’sscorein

bothmeasuresfallingyear-on-year.Onepossibleroad

toimprovementmaycomeintheformofChinese

investment.WhenPresidentXiJinpingvisitedPakistan

inApril2015,Chinapledged$46bnforroad,portsand

powerplants:aplannedinvestmentequaltoalmostthree

timesthetotalFDIthatPakistanhasreceivedoverthe

lastsevenyears.Pakistaniofficialssaymostprojects

willreachcompletioninonetothreeyears,withsome

$15.5bnofcoal,wind,solarandhydroenergyprojectsto

comeonlineby2017.

Peru

Perustruggledinthisyear’sIndex,losingfivespotsto

rank28thoverall.Itsscorehasfallenfrom4.84to4.70.

Thedeclinewaslargelyattributabletoaweakening

ofthecountry’seconomicprospects.WhiletheIMF

hasdowngradeditslongertermoutlookforPeru,its

mostconcerningpieceofdataisthatPeru’srealGDP

growthin2015isnowexpectedtocomeinat2.4%,

downfromitspredictionayearagoof5.1%.Although

expansionaryfiscalpolicyandhigheryear-on-year

miningindustryoutputaresustainingsomemeasureof

growth,lowercommoditypricesarehavingasignificant

adverseimpact.Thepriceofcopper,forinstance,has

fallenbymorethan15%in2015alone.Inaddition,

Peru’smanufacturingandconstructionsectorshave

struggledthisyear,whileinvestmentgrowthisslow,

duetodepressedbusinessconfidence.Asidefromthe

economicdata,Peru’sConnectednessscoreisdown

from4.96to4.84,mainlyasaresultofthecountrybeing

judgedtohavepoorerqualityinfrastructureandmore

inefficientcustomsproceduresyear-on-year.

Amorepositivespinmightbethatoverthelongerterm,




Contents

22

Peruislikelytobeoneofthebetter-faringcountriesin

LatinAmerica.OutofallSouthAmericancountries,ithas

oneofthebestgrowthoutlooksoverthenextfiveyears,

evenwiththedownwardrevisionsin2015.

Algeria

AlgeriamovedupfourspotsintheoverallIndexrankingto

30thin2016.Itsscorehasincreasedfrom4.10to4.46.

Ithasmademeaningfulgainsacrossallfacetsofthe

Index.ItsMarketSizeandGrowthAttractivenessscoreis

up0.40points,Compatibilityhasincreasedby0.62points

andConnectednessisupby0.21points.MarketSizeand

GrowthAttractivenesshasimprovedlargelybecauseits

economy,asmeasuredbyPPPGDP,madeimpressive

gainsyear-on-year.Compatibilityhasrisenbecause

Algeria’seconomyisnowthoughttobemoreoriented

towardslogisticsintensivesectorsthanbefore,inaddition

tometricsofsecurityimprovingyear-on-year.Finally,

Connectednessisbetterthankstoimprovedcustoms

procedures.

Themajorquestionmarksurroundingthecountryisthe

collapseintheoilpriceandthesubsequentimpactonthe

economy.WithoilresponsibleforalmostallofAlgeria’s

exportrevenues,howthecountryrespondstosuchan

adverseshockwillbecrucial.

ArgentinahasplummetedfivespotstoNo.31inthisyear’s

Index.Itsoverallscorehasdeclinedby0.25pointsto4.42.

Unsurprisingly,giventhecountry’songoingeconomic

difficulties,thedropintheMarketSizeandGrowth

Attractivenesssub-indexwasparticularlysevere(down

from4.78to4.14).Itseconomicoutlookisworsenow

comparedtoayearago,withtheIMFpredictingvirtually

noeconomicgrowthfrom2016-2020.Inflationisaround

25%andcurrencycontrolsandtraderestrictionsinplace

since2011continuetochoketheeconomy.Thisisthe

legacythatPresidentCristinaFernandezdeKirchner

leavesbehind.OnereasonforoptimismisthatArgentina

willbeundernewleadershipwiththeelectionofpro-

businessMauricioMacrifromDecember2015anditis

difficulttoimaginethateconomicpolicygoingforward

couldbeanyworsethanunderthepreviousregime.

Jordan

JordanhasfallenfourspotsintheoverallIndexrankingto

33rd.Itsscoreisdown0.26pointsto4.28.

TheMarketSizeandGrowthAttractivenesssub-index

declinedmoderately,mainlyonaccountofthecountry’s

worseningfinancialstability,butthemainculpritwas

theCompatibilitysub-index,whichscoredjust5.52this

year,downfrom6.51inlastyear’sIndex.Theweightof

instabilitycausedbycrime,violenceandterrorismspilling

overtheborderfromSyriaanditsknock-onimpactwere

primarydriversbehindthis.Apartfromthecatastrophic

humanitarianimpactoftheconflict,theUNhasestimated

thatthetotaleconomiclossfromthewarwillreach

$237bnbytheendof2015.

Ukraine

Ukraineranks34thinthisyear’sIndex,adeclineoffour

placescomparedtothepreviousyear.Itsoverallscore

hascontractedby0.37pointsto4.09.

Thecountryhasbeenenvelopedincrisissince

November2013,withmassunrestplaguingthecountry.

TheprimarilyRussian-speakingeasternandsouthern

regionsofthecountryhavebeenhittheworst.Interms

ofIndexscores,theconflicthastakenitstollonvarious

fronts.ItsMarketSizeandGrowthAttractiveness

sub-indexhascrashedby0.42pointsto3.48.TheIMF

estimatedthatrealGDPgrowthwas-6.8%in2014

andworsestillin2015,at-9.0%.Inaddition,Ukrainian

financialstabilityhastakenabighit.Moreover,the

Compatibilitysub-indexscoreof3.99,downby1.30

points,indicatesthatthebusinessenvironmentin

Ukrainehassufferedseverely.Measuresoftheinstability

areunderstandablyfarworsethanbeforethecrisis

erupted.Furthermore,FDIflowstoUkrainefellby91%to

$410min2014(thelowestlevelin15years),mainlydue

toRussiancapitalabandoningthecountry.




Contents

23

Ranking Country 2016 Index 2015 Index Change in Ranking

1 China 7.91 8.09 -

2 UAE 7.00 6.63 up 4

3 India 6.76 6.66 up 2

4 Malaysia 6.66 6.36 up 4

5 Saudi Arabia 6.62 6.76 down 3

6 Brazil 6.40 6.71 down 3

7 Indonesia 6.36 6.70 down 3

8 Mexico 6.17 6.30 up 1

9 Russia 6.16 6.57 down 2

10 Turkey 5.95 6.06 -

11 Chile 5.94 5.93 -

12 Qatar 5.83 5.87 -

13 Thailand 5.63 5.58 up 1

14 Oman 5.48 5.70 down 1

15 Philippines 5.34 5.15 up 1

16 South Africa 5.30 5.46 down 1

17 Nigeria 5.28 4.56 up 10

18 Kazakhstan 5.28 5.08 -

19 Vietnam 5.10 4.95 -

20 Morocco 5.05 5.11 down 3

21 Kuwait 5.02 4.91 -

22 Egypt 4.99 4.38 up 10

23 Pakistan 4.99 4.77 up 2

24 Uruguay 4.93 4.92 down 4

25 Colombia 4.91 4.86 down 3

26 Bahrain 4.90 4.78 down 2

27 Bangladesh 4.73 4.56 up 1

28 Peru 4.70 4.84 down 5

29 Sri Lanka 4.55 4.43 up 2

30 Algeria 4.46 4.10 up 4

31 Argentina 4.42 4.67 down 5

32 Ecuador 4.29 4.14 up 1

33 Jordan 4.28 4.54 down 4

34 Ukraine 4.09 4.46 down 4

35 Paraguay 3.71 3.74 up 3

36 Tunisia 3.69 3.87 down 1

37 Ethiopia 3.62 3.76 -

38 Bolivia 3.61 3.58 up 3

39 Venezuela 3.60 3.81 down 3

40 Tanzania 3.57 3.60 down 1

41 Libya 3.52 3.58 down 1

42 Lebanon 3.43 3.56 -

43 Kenya 3.38 3.47 -

44 Cambodia 3.36 3.46 -

45 Uganda 3.33 3.31 -


The 2016 Index




Contents

24

ChinaUAEIndia

MalaysiaSaudi Arabia

BrazilIndonesia

MexicoRussiaTurkey

ChileQatar

ThailandOman

PhilippinesSouth Africa

NigeriaKazakhstan

VietnamMorocco

KuwaitEgypt

PakistanUruguay

ColombiaBahrain

BangladeshPeru

Sri LankaAlgeria

ArgentinaEcuadorJordan

UkraineParaguay

TunisiaEthiopia

BoliviaVenezuela

TanzaniaLibya

LebanonKenya

CambodiaUganda

0.00 1.00 2.00 3.00 4.00 5.00 6.00 7.00 8.00 9.00 10.00

0.00 1.00 2.00 3.00 4.00 5.00 6.00 7.00 8.00 9.00 10.00Source: Transport Intelligence

The 2016 Index




Contents

25

Agility Emerging Markets Logistics Index for Countries with GDP more than US$300bn

The16economieswithGDPabove$300bnremainthe

sameasin2015.Whilethereismovementamongstthe

markets,itistruetosaythatlargeGDPequatestohigh

potentialasanemerginglogisticsmarket.Indeed,thetop

10marketsoverallhaveGDPabovethethreshold.

Todependsolelyonmarketsize,however,wouldpainta

misleadingpictureofwhattruelogisticsmarketpotential

lookslike.UAE,ranked2ndoverallbytheIndex,hasan

economyjust3.9%thesizeof1strankedChina,whilethe

EmiratesoutscoresIndiaandBrazil,despiteitseconomy

equalling19.4%ofIndia’seconomyand17.1%ofBrazil’s.

Ranking Country Market size and growth sub-index

Market compatibility sub-index

Market connected-ness sub-index

Total Index

1 China 9.48 6.79 6.75 7.91

2 UAE 5.58 8.61 7.73 7.00

3 India 9.32 4.80 4.95 6.76

4 Malaysia 6.41 6.56 7.00 6.66

5 Saudi Arabia 6.84 6.89 6.23 6.62

6 Brazil 7.87 6.09 4.91 6.40

7 Indonesia 8.66 4.44 4.81 6.36

8 Mexico 7.73 4.56 5.29 6.17

9 Russia 6.83 5.58 5.72 6.16

10 Turkey 6.74 5.63 5.23 5.95

11 Thailand 6.72 4.33 5.13 5.63

12 South Africa 5.54 4.81 5.31 5.30

13 Nigeria 7.79 3.40 3.50 5.28

14 Colombia 5.88 2.86 4.95 4.91

15 Argentina 4.14 4.99 4.42 4.42

16 Venezuela 3.38 3.69 3.79 3.60





Contents

26

Agility Emerging Markets Logistics Index for Countries with GDP less than US$300bn

JustasintheoverallIndex,thereturnofameasure

ofstabilitytoEgyptseesitrisethroughtheranking,

movingfrom17thto9th.ThereverseistrueofUkraine,

wheretheongoingconflicthasdetrimentallyaffectedits

prospects:thecountrytookhitstobothitsSize&Growth

AttractivenessscoreanditsCompatibilityscore.

Perhapsthemostsignificantoutcomehere,though,is

thatastaggering23ofthe29countrieswithGDPsbelow

the$300bnthresholdoutrankVenezuelaasanemerging

logisticsmarket.Infact,Chile’soverallscorewould

seeitfinish11thintherankingofcountrieswithGDP

above$300bn.Againstabackdropoflowereconomic

prospectsacrossallemergingmarkets,thisserves

asapotentreminderthatinvestmentdecisionsmust

bebothstrategicandnuanced,reflectingtheunique

characteristicsofthemarketsunderinvestigation.While

forecastssuggest2016willseesomethingofarebound

infortunesforemergingmarkets,thedaysofinvestment

guidedbyheadlinefigures–andindeed,thedaysof

‘investmentbyacronym’–shouldbefullyconsignedto

history.



Market connected-ness sub-index

Total Index

1 Chile 5.26 6.62 6.32 5.94

2 Qatar 4.83 7.62 5.97 5.83

3 Oman 3.93 7.54 6.11 5.48

4 Philippines 6.56 4.79 4.27 5.34

5 Kazakhstan 4.60 6.94 5.14 5.28

6 Vietnam 5.42 5.15 4.72 5.10

7 Morocco 4.15 6.05 5.52 5.05

8 Kuwait 4.63 6.59 4.59 5.02

9 Egypt 6.12 2.85 4.90 4.99

10 Pakistan 6.85 2.86 4.06 4.99

11 Uruguay 3.38 6.71 5.69 4.93

12 Bahrain 3.27 6.21 6.01 4.90

13 Bangladesh 5.91 4.45 3.56 4.73

14 Peru 4.91 4.03 4.84 4.70

15 Sri Lanka 3.25 5.96 5.26 4.55

16 Algeria 4.87 4.49 3.98 4.46

17 Ecuador 2.80 4.65 5.77 4.29

18 Jordan 2.81 5.52 5.25 4.28

19 Ukraine 3.48 3.99 4.84 4.09

20 Paraguay 2.82 4.76 4.15 3.71

21 Tunisia 3.06 4.18 4.14 3.69

22 Ethiopia 3.37 4.39 3.48 3.62

23 Bolivia 2.76 4.52 4.06 3.61

24 Tanzania 3.15 4.52 3.53 3.57

25 Libya 2.68 2.08 5.25 3.52

26 Lebanon 2.46 4.33 4.04 3.43

27 Kenya 3.34 2.23 4.06 3.38

28 Cambodia 2.53 4.34 3.77 3.36

29 Uganda 2.90 3.48 3.74 3.33





Contents

27


Agility Emerging Markets Logistics Index – Sub-Indices



Market connectedness sub-index

Total Index

1 China 9.48 6.79 6.75 7.91

2 UAE 5.58 8.61 7.73 7.00

3 India 9.32 4.80 4.95 6.76

4 Malaysia 6.41 6.56 7.00 6.66

5 Saudi Arabia 6.84 6.89 6.23 6.62

6 Brazil 7.87 6.09 4.91 6.40

7 Indonesia 8.66 4.44 4.81 6.36

8 Mexico 7.73 4.56 5.29 6.17

9 Russia 6.83 5.58 5.72 6.16

10 Turkey 6.74 5.63 5.23 5.95

11 Chile 5.26 6.62 6.32 5.94

12 Qatar 4.83 7.62 5.97 5.83

13 Thailand 6.72 4.33 5.13 5.63

14 Oman 3.93 7.54 6.11 5.48

15 Philippines 6.56 4.79 4.27 5.34

16 South Africa 5.54 4.81 5.31 5.30

17 Nigeria 7.79 3.40 3.50 5.28

18 Kazakhstan 4.60 6.94 5.14 5.28

19 Vietnam 5.42 5.15 4.72 5.10

20 Morocco 4.15 6.05 5.52 5.05

21 Kuwait 4.63 6.59 4.59 5.02

22 Egypt 6.12 2.85 4.90 4.99

23 Pakistan 6.85 2.86 4.06 4.99

24 Uruguay 3.38 6.71 5.69 4.93

25 Colombia 5.88 2.86 4.95 4.91

26 Bahrain 3.27 6.21 6.01 4.90

27 Bangladesh 5.91 4.45 3.56 4.73

28 Peru 4.91 4.03 4.84 4.70

29 Sri Lanka 3.25 5.96 5.26 4.55

30 Algeria 4.87 4.49 3.98 4.46

31 Argentina 4.14 4.99 4.42 4.42

32 Ecuador 2.80 4.65 5.77 4.29

33 Jordan 2.81 5.52 5.25 4.28

34 Ukraine 3.48 3.99 4.84 4.09

35 Paraguay 2.82 4.76 4.15 3.71

36 Tunisia 3.06 4.18 4.14 3.69

37 Ethiopia 3.37 4.39 3.48 3.62

38 Bolivia 2.76 4.52 4.06 3.61

39 Venezuela 3.38 3.69 3.79 3.60

40 Tanzania 3.15 4.52 3.53 3.57

41 Libya 2.68 2.08 5.25 3.52

42 Lebanon 2.46 4.33 4.04 3.43

43 Kenya 3.34 2.23 4.06 3.38

44 Cambodia 2.53 4.34 3.77 3.36

45 Uganda 2.90 3.48 3.74 3.33




Contents

28

Market Size & Growth Attractiveness

WithintherankingforMarketSize&Growth

Attractiveness,thetopfourrankingmarketsare

unchangedforathirdconsecutiveyear.Nigeriahas

risentotake5thintheranking,whilePakistanjumpedto

7thasaresultofmarkedlybettergrowthprospectsfor

itseconomythanayearago.Russia,however,hasfelt

theimpactofpoorergrowthexpectationsfollowingthe

impositionofEUandUSsanctions,whichhaveseenit

slipto9thinthismeasure.

Atthebottomendofthescale,Cambodia,forthefirst

timesinceitwasaddedtotheIndexin2013,isnotthe

lowestrankedMarketforSize&GrowthAttractiveness.

Paraguay’simprovedoutlookhasseenitrisefromthe

lowestreachesofthismeasuretoo.



1 China 9.48

2 India 9.32

3 Indonesia 8.66

4 Brazil 7.87

5 Nigeria 7.79

6 Mexico 7.73

7 Pakistan 6.85

8 Saudi Arabia 6.84

9 Russia 6.83

10 Turkey 6.74

11 Thailand 6.72

12 Philippines 6.56

13 Malaysia 6.41

14 Egypt 6.12

15 Bangladesh 5.91

16 Colombia 5.88

17 UAE 5.58

18 South Africa 5.54

19 Vietnam 5.42

20 Chile 5.26

21 Peru 4.91

22 Algeria 4.87

23 Qatar 4.83

24 Kuwait 4.63

25 Kazakhstan 4.60

26 Morocco 4.15

27 Argentina 4.14

28 Oman 3.93

29 Ukraine 3.48

30 Uruguay 3.38

31 Venezuela 3.38

32 Ethiopia 3.37

33 Kenya 3.34

34 Bahrain 3.27

35 Sri Lanka 3.25

36 Tanzania 3.15

37 Tunisia 3.06

38 Uganda 2.90

39 Paraguay 2.82

40 Jordan 2.81

41 Ecuador 2.80

42 Bolivia 2.76

43 Libya 2.68

44 Cambodia 2.53

45 Lebanon 2.46




Contents

29

ChinaIndia

IndonesiaBrazil

NigeriaMexico

PakistanSaudi Arabia

RussiaTurkey

ThailandPhilippines

MalaysiaEgypt

BangladeshColombia

UAESouth Africa

VietnamChilePeru

AlgeriaQatar

KuwaitKazakhstan

MoroccoArgentina

OmanUkraineUruguay

VenezuelaEthiopia

KenyaBahrain

Sri LankaTanzania

TunisiaUganda

ParaguayJordan

EcuadorBoliviaLibya

CambodiaLebanon

0.00 1.00 2.00 3.00 4.00 5.00 6.00 7.00 8.00 9.00 10.00

0.00 1.00 2.00 3.00 4.00 5.00 6.00 7.00 8.00 9.00 10.00

Market Size & Growth Attractiveness Sub-Index





Contents

30

Market Compatibility

Fiveofthetop10rankedmarketsforCompatibilitycome

fromtheMiddleEast&NorthAfricaregion.TheUAE

retainsitspositionatthetopforasecondconsecutive

year,althoughitsscorehasfallen.ThattheUAEistop,

though,isunlikelytobeasurprisetothosewithexposure

tothemarket.Its34freetradezones,non-existent

corporationtaxandtheofferoffullownership,aswellas

unlimitedrepatriationofprofits,makeitahighlyappealing

businessenvironmentforproducersandmanufacturers

alike,aswellastologisticsserviceproviders.

Kazakhstan’sfavourabletaxregimeseesitriseto

becomethe4thhighestrankedmarketforCompatibility

thisyearwhich,combinedwithSaudiArabia’sclimb

to5th,seesChinafalloutofthetop5inthismeasure.

Anothermajoremergingmarkettofalldowntheranking

isRussia,whichslipsthreeplacesto16th,butitis

Ukrainewhichsuffersmostheavilyfollowingtheconflict

betweenthetwo,dropping19spotsfrom18thto37th.

ConflictalsocausedJordan’sslide–havingreached4th

in2014,thecountry’sslidehasacceleratedasitfollowed

afourplacedropin2015withafurthernineposition

lossin2016,toendin17thoverall–asthetroublesin

neighbouringSyriaweighdownitsprospects.

LibyapropsuptheCompatibilityrankingforasecond

year,andwhileEgyptandNigeriawereabletorise,

neithercouldmatchtheirrateofprogressintheSize&

GrowthAttractivenessranking.Despiteitshighoverall

ranking,Indiastilllanguishesasthe21strankedmarket

forCompatibility.Thismayrepresentariseofeight

positions,butitservestohighlightthatthecountry’s

businessenvironmentisstillinneedofsignificantand

rapidimprovement.


Ranking Country Market compatibility sub-index

1 UAE 8.61

2 Qatar 7.62

3 Oman 7.54

4 Kazakhstan 6.94

5 Saudi Arabia 6.89

6 China 6.79

7 Uruguay 6.71

8 Chile 6.62

9 Kuwait 6.59

10 Malaysia 6.56

11 Bahrain 6.21

12 Brazil 6.09

13 Morocco 6.05

14 Sri Lanka 5.96

15 Turkey 5.63

16 Russia 5.58

17 Jordan 5.52

18 Vietnam 5.15

19 Argentina 4.99


21 India 4.80

22 Philippines 4.79

23 Paraguay 4.76

24 Ecuador 4.65

25 Mexico 4.56

26 Bolivia 4.52

27 Tanzania 4.52

28 Algeria 4.49

29 Bangladesh 4.45

30 Indonesia 4.44

31 Ethiopia 4.39

32 Cambodia 4.34

33 Lebanon 4.33

34 Thailand 4.33

35 Tunisia 4.18

36 Peru 4.03

37 Ukraine 3.99

38 Venezuela 3.69

39 Uganda 3.48

40 Nigeria 3.40

41 Colombia 2.86

42 Pakistan 2.86

43 Egypt 2.85

44 Kenya 2.23

45 Libya 2.08




Contents

31

UAEQatarOman

KazakhstanSaudi Arabia

ChinaUruguay

ChileKuwait

MalaysiaBahrain

BrazilMorocco

Sri LankaTurkeyRussiaJordan

VietnamArgentina

South AfricaIndia

PhilippinesParaguayEcuadorMexicoBolivia

TanzaniaAlgeria

BangladeshIndonesia

EthiopiaCambodia

LebanonThailand

TunisiaPeru

UkraineVenezuela

UgandaNigeria

ColombiaPakistan

EgyptKenyaLibya

0.00 1.00 2.00 3.00 4.00 5.00 6.00 7.00 8.00 9.00 10.00

0.00 1.00 2.00 3.00 4.00 5.00 6.00 7.00 8.00 9.00 10.00

Market Compatibility Sub-Index





Contents

32

Market Connectedness

Thetop10rankingpositionsforMarketConnectedness

displayedalargeamountofcontinuityyear-on-yearas

themarketstooccupythetopthreepositions–UAE,

MalaysiaandChina–wereunchanged,whilenineofthe

10remainedunchanged.ThecasualtywasSouthAfrica,

whichslidto13thandwasreplacedbyRussia.The

infrastructuredeficitsoftwomajoremergingmarkets–

BrazilandIndia–aresharplyillustratedinthismeasure

ofdomesticandinternationalconnectivity,withboth

languishingindistinctmediocrity.

Overall,theIndexin2016paintsabroadlypositivepicture

ofNigeria’spotentialasanemergingmarket.Havingrisen

10placesinthecombinedranking,itmaywellserveasa

warningtothoseexcitedbythecountry’spotential,that

itsinfrastructureislikelytoseverelylimitgrowthunless

significantprogressismade.Inthismeasure,Nigeria

ranks44thofthe45marketsunderexamination,having

regressedoverthelastyear.


Ranking Country Market connectedness sub-index

1 UAE 7.73

2 Malaysia 7.00

3 China 6.75

4 Chile 6.32

5 Saudi Arabia 6.23

6 Oman 6.11

7 Bahrain 6.01

8 Qatar 5.97

9 Ecuador 5.77

10 Russia 5.72

11 Uruguay 5.69

12 Morocco 5.52


14 Mexico 5.29

15 Sri Lanka 5.26

16 Jordan 5.25

17 Libya 5.25

18 Turkey 5.23

19 Kazakhstan 5.14

20 Thailand 5.13

21 Colombia 4.95

22 India 4.95

23 Brazil 4.91

24 Egypt 4.90

25 Peru 4.84

26 Ukraine 4.84

27 Indonesia 4.81

28 Vietnam 4.72

29 Kuwait 4.59

30 Argentina 4.42

31 Philippines 4.27

32 Paraguay 4.15

33 Tunisia 4.14

34 Bolivia 4.06

35 Pakistan 4.06

36 Kenya 4.06

37 Lebanon 4.04

38 Algeria 3.98

39 Venezuela 3.79

40 Cambodia 3.77

41 Uganda 3.74

42 Bangladesh 3.56

43 Tanzania 3.53

44 Nigeria 3.50

45 Ethiopia 3.48




Contents

33

UAEMalaysia

ChinaChile

Saudi ArabiaOman

BahrainQatar

EcuadorRussia

UruguayMorocco

South AfricaMexico

Sri LankaJordan

LibyaTurkey

KazakhstanThailand

ColombiaIndia

BrazilEgyptPeru

UkraineIndonesia

VietnamKuwait

ArgentinaPhilippines

ParaguayTunisiaBolivia

PakistanKenya

LebanonAlgeria

VenezuelaCambodia

UgandaBangladesh

TanzaniaNigeria

Ethiopia

0.00 1.00 2.00 3.00 4.00 5.00 6.00 7.00 8.00 9.00 10.00

0.00 1.00 2.00 3.00 4.00 5.00 6.00 7.00 8.00 9.00 10.00

Market Connectedness Sub-Index





Contents

34

10.00

9.00

8.00

7.00

6.00

5.00

4.00

3.00

2.00

1.00

0.00

0.00 1.00 2.00 3.00 4.00 5.00 6.00 7.00 8.00 9.00 10.00

Smaller markets but good prospects and easy market entry

Low potential except niche markets,challenging market environment

High market potential with few barriers to market entry

Large markets but potential constrained by barriers to entry

Market Size and Growth

Mar

ket C

ompa

tibili

ty a

nd C

onne

cted

ness

Oman Qatar

UAE

Malaysia

Saudi Arabia

Russia Brazil

Mexico

PakistanNigeria

Indonesia India

China

TurkeySouth Africa

Bangladesh

ColombiaEgypt

ThailandPhilippinesPeru Vietnam

Algeria

UruguayBahrain

Sri LankaJordan

Ecuador

ParaguayTunisia

EthiopiaTanzania

UkraineArgentina

Morocco Kazakhstan

Kuwait

Chile

VenezuelaKenya

BoliviaLebanonCambodia

LibyaUganda

Emerging Markets Quadrant

Theemergingmarketsquadrantdisplaystherelative

positionsofthecountriesintheIndex.Thechartis

dividedintofourareasbasedonsizeandpotential

barrierstoentry(anaverageof“MarketCompatibility”

and“MarketConnectedness”).

Countriesinthetoprightquartile,suchasChina,

representthebiggesttargetsforlogisticsinvestments

aswellastheeasiestmarketstooperatein.Inthetop

leftquartilearethosecountriesthatrepresentsmaller

opportunities,butareeasilypenetrated.OmanandQatar

representthesetypesofopportunities.

Thebottomhalfofthechartincludescountriesinwhich

therearesignificantbarrierstoentryanddifficultiesin

operating.Astheseeconomiesmatureandconnectmore

withglobalmarketstheyarelikelytomovetowardsthe

upperquartiles.NigeriaandKenyaareexamplesofthese

typesofopportunities.





Contents

35

Emerging Market Trade Lanes

Thestateofemergingmarkettradein2015canbe

summarisedinonesimplegraphthattrackstotalyear-

on-yearexportandimportgrowthforemergingmarkets.

Thegraphmeasuresthetotalvalueoftradeovertime,but

holdsthepricesofallgoodsconstant,sothatchanges

areonlydrivenbyvariationinthequantityofgoods

exportedorimported.

Quitesimply,2015hasbeenapooryearforemerging

markettradeonthewhole.For2012to2014,import

andexportvolumegrowthaveraged4.7%and4.2%

respectively,withrelativelylittlevariationaboveorbelow

thosemarks.In2015,year-on-yeargrowthrateshave

clearlyfallenshortofthesefigures,evendippinginto

negativeterritoryinthesecondandthirdquartersof

theyear.

Althoughthevolumefiguresinthechartareperhapsof

mostconcerntoforwardersandlogisticsproviders,when

allowingpricestofluctuateovertimethefigureslook

significantlyworse.Commoditypriceshavedeteriorated

in2015,notonlyreducingthevalueofrawmaterials,

butalsoinallmannerofproductswhichrequirethemas

inputs.Inaddition,whenmeasuringtradeinUSdollars

(asismostoftenthecase),thepictureisevenbleaker

giventhecurrency’sincreasingvalueoverthecourse

of2015,effectivelyerodingthevalueofgoodspricedin

emergingmarketcurrencies.

Sev

en




Contents

36

25.0%

20.0%

15.0%

10.0%

5.0%

0.0%

-5.0%

-10.0%

-15.0%

-20.0%

2008 2009 2010 2011 2012 2013 2014 2015

Imports Exports

Emerging market merchandise trade volumes, six-month average, % change on a year earlier

Source: CPB World Trade Monitor

Sogiventheanaemictradenumbersin2015,isthere

reasontoworryaboutthelong-termfutureofemerging

markettrade?Yesandno.ThelatestsetofIMFforecasts

predictsthatemergingmarketimportandexportvolume

growthin2016willbe4.3%and4.6%respectively,and

thatbothwillriseandhoveraround5%from2017-2020.

Essentially,areturntosomethinglikethemoderate

growthfiguresof2012-2014.From1990-2008,though,

emergingmarketswereregularlyrecordingtradevolume

growthratesintherangeof5-10%,sometimeshigher.

Forthenextfiveyearsatleast,growthrateslikethat

seemtobealongwayoff.

Inthesectionthatfollows,airandseavolumedatafor

tradelanesinvolvingemergingmarketsandtheEU/

USwillbeanalysed.Asisusualwithemergingmarkets,

forecastsoftonnagefor2015onthesetradelanes

suggestavastamountofdifferenceinperformance

betweencountriesandhighvolatilitywhencomparing

volumesovertime.Althoughthereareobviouslymany

factorsatwork,oneimportantoveralltrendtopickupon

in2015istheinfluenceofexchangeratemovements.

AccordingtoBankofInternationalSettlementsdata,on

atrade-weightedbasisandinrealterms,theaverage

monthlyvalueoftheeurobetweenJanuary-September

2015,comparedtothesameperiodin2014,is9.6%

lower.Conversely,thedollaris11.2%higher.The

implicationisthatimportsaremoreexpensiveforthe

EuroareabutcheaperfortheUS,stimulatinglower

importdemandintheEUandgreaterdemandintheUS.

Theoppositeistrueforexports.Itisworthaddingthat

overthepastfewyears,suchmovementincurrencieshas

notreallybeenafactor,withthevalueofthedollarand

eurorelativelyconstantfrom2010untilthestartof2014.

Sowhatdotheoverallairandseavolumefiguresreveal?

EUairandseaimportgrowthratesfromemerging

marketsin2015arepredictedtofallshortofUSgrowth

figures.Ontheotherhand,EUexportgrowthratesto

emergingmarketsbeattheUSfigures.Exchangerate

movementscouldwellbeasignificantfactorbehindthis

patternofresults.




Contents

37

Euro and US Trade-Weighted Exchange Rate Indices (2010=100)

2015 EU/US Air and Sea Tonnage Growth with 45 Emerging Markets

Note: 2015* figures are forecasts Source: Transport Intelligence

20.0%

15.0%

10.0%

5.0%

0.0%

-5.0%

-10.0%

-15.0%

EU AirExports

US AirExports

EU SeaExports

US SeaExports

EU AirImports

US AirImports

EU SeaImports

US SeaImports

120

115

110

105

100

95

90

85

80

2010 2011 2012 2013 2014 2015

Euro US Dollar Source: Bank for International Settlements




Contents

38

Rank Origin Destination 2014 Tons 2015* Tons 14-15 Growth

1 EU China 595,757 690,699 15.9%

2 US China 282,261 311,890 10.5%

3 EU UAE 202,825 245,823 21.2%

4 EU India 154,589 156,573 1.3%

5 EU Saudi Arabia 105,948 115,166 8.7%

6 EU Turkey 93,464 114,161 22.1%

7 EU Mexico 88,943 110,834 24.6%

8 EU Brazil 111,483 109,863 -1.5%

9 EU South Africa 89,773 104,803 16.7%

10 US Brazil 119,530 102,265 -14.4%

n/a EU All 45 EM 2,143,124 2,497,725 16.5%

n/a US All 45 EM 1,134,428 1,116,802 -1.6%

n/a EU and US All 45 EM 3,277,552 3,614,526 10.3%

Air Freight Top 10 Trade Lanes – EU/US to Emerging Markets

Air Freight EU/US to Emerging Market Top 5 Trade Lanes 2005-2015 Growth



400

350

300

250

200

150

100

50

0

2005 2006 2007 2008 2009 2010 2011 2012 20142013 2015*

EU-China

2005

= 1

00

US-China EU-UAE EU-India EU-Saudi Arabia




Contents

39

Onaggregate,the90tradelanesgoingfromtheEU/USto

the45emergingmarketsareforecasttonnagegrowthof

10.3%in2015.Cumulatively,EUtradelanesarepredicted

growthof16.5%,whereasUStradelanesareanticipated

volumegrowthof-1.6%.Thetop10lanesarepredicted

toaccountfor57.0%oftotalairtonnagein2015.This

forecastimpliesanincreaseof0.7percentagepoints

year-on-year,signallingthatthetop10emergingmarket

airfreightdestinationsarebecomingrelativelymore

importantcomparedtothechasingpack.

Unsurprisingly,Chinacontinuestooccupythetoptwo

spots.OutofallairfreightgoingfromtheEUtothe45

emergingmarkets,Chinaisexpectedtobetherecipient

of27.7%oftonnage.FortheUS,thecorrespondingfigure

is27.9%.EU-Chinaairfreighttonnagewillremainmore

thantwiceaslargeasUS-Chinatonnage,withthegap

wideningfurtherin2015asEUgrowth(15.9%)exceeds

theUS’performance(10.5%).

Bycommodity,EU-Chinaairfreightishavingamixed

year.Thetraditionalmajorcommoditygroupsof

machinery&machineryparts(149,000tonnesin2014),

electronics(99,000tonnes)andvehicles&vehicleparts

(57,000tonnes)–whichtogetheraccountedfor51.2%

oftotalairfreighttonnagein2014–haveallstruggled

sofarin2015.ForJanuary-August2015,volumesfor

eachoftheseproductgroupsaredownby2.3%,5.5%

and42.1%respectively,year-over-year.However,these

declineshavebeenmorethanoffsetbygrowthintwo

sectorswherevolumesareusuallyrelativelylow–dairy

products(41,000tonnesforJanuary-August2015)and

fertilisers(33,000tonnes).

US-Chinaairfreightisdominatedbymachinery&

machineryparts(55,000tonnesin2014),electronics

(36,000tonnes),optic,photo,medicandsurgical

instruments(25,000tonnes)andplastics&plasticarticles

(23,000tonnes),whichtogethercomprisedalmost50%

ofairfreightin2014.ForJanuary-August2015,thefour

groupshaveallseenpositiveyear-on-yeargrowthof

0.7%,8.1%,6.4%and17.0%respectively.Othernotable

climbersincludevehicles&vehicleparts(8,000tonnes)

andfruits(7,000tonnes),withtheirtonnagerisingby

35.2%and20.0%respectively.

AsidefromChina,anumberofotheremergingmarkets

inthetop10areforecaststrongimportperformances.

EU-UAEairfreightispredictedtogrowby21.2%in

2015,largelyonthebackofariseinoil&gasrelated

airimports.ForJanuary-August2015,airfreightforthis

productgroupamountedtoalmost37,000tonnes,up

fromaround16,000tonnesoverthesameperiodin2014.

EU-TurkeyandEU-Mexicoarepredictedsimilarlystrong

years,withvolumesanticipatedtoincreasebyover20%

forbothtradelanesin2015.ForEU-Turkey,itsmost

importantproductgroupsofoil&gasproducts(25.8%),

machinery&machineryparts(35.2%),electronics

(36.1%)andvehicle&vehicleparts(77.0%)haveall

recordedveryimpressivegrowthforJanuary-August

2015.ForEU-Mexico,heavyindustryaloneappearsto

havedrivenmostexpansion,withmachinery&machinery

parts(39.1%)andvehicles&vehicleparts(17.8%)largely

behindhighervolumes.

EU-SouthAfricaairfreightisanticipatedtoriseby16.7%in

2015,mainlyonaccountofhighermachinery&machinery

partsimports(17.8%growthforJanuary-August2015),

althoughproductgroupssuchaselectronics(12.2%),

vehicles&vehicleparts(29.8%)andpharmaceuticals

(26.4%)arealsoprovidingstrongimpetus.

TheobviousloserthisyearisBrazil.Airimportsfrom

theUSarepredictedtocontractby14.4%in2015.Its

corecommoditygroupsofmachinery&machineryparts

andelectronics,whichtogetherrepresentedabout40%

oftonnagein2014,haverecordedvolumedeclinesof

21.7%and24.7%respectivelyforJanuary-August2015,

comparedtothesameperiodlastyear.EU-Brazilair

freightisexpectedtodeclinebyjust1.5%in2015,with

machinery&machinerypartstradeproppingupoverall

tonnage.Electronics(-17.3%)andvehicles&vehicleparts

(-6.9%)arechiefamongthesufferingsectors.




Contents

40

Rank Origin Destination 2014 Tons 2015* Tons

14-15 Growth

2012 Index

2013 Index

2014 Index

2015 Index*

2012-2015 CAGR

2005-2015 CAGR

1 EU Indonesia 27,505 47,528 72.8% 115 124 106 183 16.8% 6.3%

2 EU Peru 10,896 17,608 61.6% 173 189 194 313 21.9% 12.1%

3 EU Ethiopia 7,791 12,358 58.6% 129 170 158 251 24.9% 9.6%

4 EU Thailand 51,707 79,061 52.9% 117 162 107 163 11.8% 5.0%

5 EU Malaysia 41,508 58,964 42.1% 149 156 155 220 13.9% 8.2%

6 EU Ecuador 7,592 10,664 40.5% 131 153 183 258 25.4% 9.9%

7 EU Philippines 18,447 25,315 37.2% 95 107 121 165 20.1% 5.2%

8 EU Qatar 50,012 67,999 36.0% 249 275 307 417 18.7% 15.3%

9 EU Ukraine 10,165 13,287 30.7% 71 102 61 79 3.7% -2.3%

10 US Vietnam 20,605 26,250 27.4% 280 341 491 625 30.7% 20.1%

11 US Kuwait 12,766 16,244 27.2% 133 135 139 177 10.1% 5.9%

12 EU Mexico 88,943 110,834 24.6% 128 120 126 157 7.0% 4.6%

13 EU Egypt 41,592 51,346 23.5% 108 89 116 143 9.8% 3.6%

14 EU Turkey 93,464 114,161 22.1% 136 155 152 186 11.1% 6.4%

15 EU UAE 202,825 245,823 21.2% 145 157 173 209 13.0% 7.7%

16 EU Jordan 11,412 13,674 19.8% 98 129 100 120 6.8% 1.8%

17 EU Russia 78,133 93,199 19.3% 60 61 56 67 3.4% -4.0%

18 EU Lebanon 16,672 19,476 16.8% 125 130 136 159 8.3% 4.7%

19 EU South Africa 89,773 104,803 16.7% 131 125 113 131 0.0% 2.8%

20 EU China 595,757 690,699 15.9% 265 338 297 345 9.1% 13.2%

21 EU Colombia 19,596 22,682 15.7% 111 118 127 147 9.9% 3.9%

22 EU Nigeria 35,079 40,141 14.4% 126 118 117 134 2.0% 3.0%

23 EU Bahrain 11,693 13,377 14.4% 96 84 107 123 8.6% 2.1%

24 EU Morocco 18,455 20,872 13.1% 218 221 191 216 -0.3% 8.0%

25 EU Chile 23,533 26,308 11.8% 119 139 122 137 4.8% 3.2%

n/a EU All 45 EM 2,143,124 2,497,725 16.5% 147 160 153 178 6.7% 5.9%

n/a US All 45 EM 1,134,428 1,116,802 -1.6% 164 163 167 165 0.0% 5.1%

n/a EU and US All 45 EM 3,277,552 3,614,526 10.3% 152 161 158 174 4.5% 5.7%

Air Freight Fastest Growing Trade Lanes – EU/US to Emerging Market (Index of Tons, 2005=100)





Contents

41

Outofthetop25fastestgrowingemergingmarketair

importtradelanesin2015,23havetheEUastheirorigin,

comparedtojusttwofortheUS(US-VietnamandUS-

Kuwait),althoughUS-Philippines(11.1%)andUS-China

(10.5%)havejustmissedout,ranking26thand27th.On

thewhole,emergingmarketairimportsfromtheEUhave

grownverystrongly,whereasUSoriginairfreighthas

moreorlessstagnated.

EU-Indonesiaispredictedtobethefastestgrowing

tradelanein2015,withgrowthof72.8%drivenalmost

exclusivelybyfertiliserimports,whichhaveincreased

fromvirtuallyzeroin2014,to14,000tonnesforJanuary-

August2015.EUfertiliserexportsseemtoberesponsible

forstronggrowthinanumberoftradelanes,including

EU-Ethiopia(withvolumesofelectronicsalsogrowing

quickly),EU-ThailandandEU-Malaysia.EU-Thailand’s

performanceissomewhatlessimpressive,astonnage

hasmerelyrecoveredto2013levels,withvolumes

severelycontractingin2014.

Lookingattheperformanceofsomeothersizeabletrade

lanes,EU-Qatarispredictedgrowthof36.0%in2015,

mainlythankstooil&gassectorproductvolumesmore

thandoublinginJanuary-August2015,comparedtothe

sameperiodin2014.Thelong-termperformanceofthis

tradelaneisamongthebest,exemplifiedbya2005-

2015CAGRof15.3%.Inaddition,itsgrowthtrajectoryis

remarkablyconsistent,displayingrelativelylittlevolatility.

ElsewhereintheMiddleEast,EU-Egyptairfreightis

anticipatedtoriseby23.5%,thanksmainlytogrowthin

machinery&machineryparts,oil&gassectorproducts

andelectronics.EU-Russiavolumesarepredictedto

improveby19.3%,thoughitisworthnotingthatRussia’s

airimportsfromtheEUin2015areestimatedtobeabout

onethirdlowerthantheywerein2005,asindicatedbyits

2015indexvalueof67.

Asearlierstated,US-VietnamandUS-Kuwaitwerethe

onlytwotradelaneswiththeUSastheirorigintomake

thetop25fastestgrowingtradelanelistin2015.ForUS-

Vietnam,exportsoffish–whichaccountedfor27%(the

highestsingleproductgroup)ofthetradelane’stonnage

in2014–expandedby8.9%forJanuary-August2015.

Footwear,machinery&machinerypartsandelectronics

arealsoforecastdecentgrowthin2015.FortheUS-

Kuwait,perishablesareexpectedtodrivemuchofthe

growth.Tonnageofvegetablesandfruitshasrisenby

10.2%and19.2%respectivelyforJanuary-August2015.

Theyaccountedfor20.4%and13.4%oftotaltonnagein

2014.Inaddition,machinery&machinerypartsvolumes

forJanuary-August2015areupby73.8%year-on-year,

havingaccountedfor12.7%oftotaltonnagein2014.




Contents

42


1 China US 1,194,106 1,344,115 12.6%

2 China EU 1,315,294 1,087,696 -17.3%

3 Kenya EU 196,060 204,888 4.5%

4 India EU 190,898 178,351 -6.6%

5 Colombia US 164,972 158,520 -3.9%

6 Chile US 150,574 133,357 -11.4%

7 India US 116,528 127,457 9.4%

8 Peru US 106,250 114,673 7.9%

9 Vietnam US 65,159 90,702 39.2%

10 Ethiopia EU 57,615 89,398 55.2%

n/a All 45 EM EU 2,695,843 2,455,204 -8.9%

n/a All 45 EM US 2,246,903 2,453,996 9.2%

n/a All 45 EM EU and US 4,942,746 4,909,200 -0.7%

Air Freight Top 10 Trade Lanes – Emerging Market to EU/US


Air Freight Emerging Market to EU/US Top 5 Trade Lanes 2005-2015 Growth


400

350

300

250

200

150

100

50

0

2005 2006 2007 2008 2009 2010 2011 2012 20142013 2015*

China-US

2005

= 1

00

China-EU Kenya-EU India-EU Colombia-EU




Contents

43

Intotal,itisestimatedthattheEUandUSwillimport

0.7%lessairfreightfromemergingmarketsin2015

comparedto2014.TheEU’stonnageisexpectedto

declineby8.9%in2015,whereasUSvolumesaresetto

increaseby9.2%.

Outofthe90tradelanesgoingfromthe45emerging

marketstotheEU/US,thetop10lanesarepredictedto

accountfor71.9%oftotalairtonnagein2015.Chinais

byfarthelargestexporter,havingcomprised48.8%of

allemergingmarketairfreighttotheEUand53.1%ofair

freighttotheUSin2014.Inanutshell,Chinarepresents

aroundhalfofemergingmarketairexporttonnagetothe

USandEU.

ForairexportstotheUS,Chineseairfreightisforecasta

strongyearfor2015,withdouble-digitgrowthof12.6%

predicted.Conversely,China-EUairfreightisexpected

tocontractby17.3%.Thecontrastinperformanceis

soseverethatChina-USwilldisplaceChina-EUasthe

largesttradein2015.Toputthisintocontext,China-EU

airfreighttonnagewasabout10%largerthanChina-US

tonnagein2014.In2015,China-EUtonnageisanticipated

tobealmost20%smallerthanChina-UStonnage.From

January-August2015,China-EUtonnageofelectronics

andmachinery–byfarthetwomostimportantproduct

groups–decreasedby26.4%and21.8%respectively.

Ontheotherhand,forChina-USfreight,electronicsand

machinerytonnagewasupby12.7%and6.9%over

thesameperiod.Exchangeratemovementspotentially

playedanimportantroleindrivingthesefigures.

AparticularlysurprisingstatisticisthatKenyaisthethird

largestemergingmarketairexporttradelanebytonnage,

exceedingnotjustitscontinentalcompetitorssuchas

SouthAfricaandNigeria,buteventhelikesofIndia.

Tonnageispredictedtoincreaseby4.5%in2015,toover

200,000tonnes.Twoproductgroupsareresponsiblefor

almostallofKenya’sairexports–flowers(72.1%in2014)

andvegetables(24.0%in2014).ForJanuary-August

2015,exportsofflowerstotheEUhaveincreasedby

4.0%,whereasforvegetablesthecorrespondingfigure

is-2.5%.Thismarketisclearlyinterestingmajorlogistics

providers.InNovember2015,Panalpinaannouncedthatit

wouldacquireamajoritystakeinAirfloinNovember2015:

aKenyanandNetherlandsbasedforwarderspecialised

inhandlingflowersandvegetables.Panalpinaclaims

thecompanyisthesecondlargestforwarderinKenya.

StayingwithAfrica,forEthiopia-EUairfreight–thetenth

largesttradelane–thedependencyonflowersiseven

greater(92.1%ofexportsin2014).ForJanuary-August

2015,exportsofflowerswereupby52.8%year-on-year.

AsidefromEthiopia-EU,theonlyothertradelanein

thetop10torecordverystronggrowthisVietnam-US

(39.2%in2015).Thistradelaneisdominatedbyapparel

(46.9%ofexportsin2014),althoughfootwear(13.4%),

machinery&machineryparts(12.8%)andelectronics

(10.4%)arealsoimportant.ForJanuary-August2015,

exportsoftheseproductgroupshaveincreasedby

63.6%,73.3%,9.5%and98.6%respectively.

MovingtoSouthAmerica,Colombia-USandChile-US

arereportingdecliningvolumes.Exportsofflowers,

whichaccountforalmost90%ofColombianairtonnage

totheUS,havefallenby8.5%inJanuary-August2015,

comparedtothesameperiodin2014.Meanwhile,Chile’s

exportsoffish,whichcomprisedover75%ofitsexports

totheUSin2014,havedeclinedby2.5%inJanuary-

August2015.Inaddition,vegetablesexportscollapsed

by31.3%.Peru-USairfreight,ofwhichabout90%is

vegetables,isexpectedtoincreaseby7.9%in2015.

Perhapsthemostinterestingfeatureofthistop10isthe

absenceofBrazil.Brazil-EUairfreightisestimatedto

contractby27.6%in2015,toaround65,000tonnes,while

Brazil-USairfreightisactuallyforecastgrowthof8.5%,

to42,000tonnes.

Finally,India’sprospectsfor2015aremixed.Airfreight

tonnagetotheEUisexpectedtodeclineby6.6%,whereas

tonnagetotheUS,ispredictedtogrowby9.4%.For

January-August2015,pharmaceuticalsexporttonnageto

theUShasincreasedby19.4%year-on-year,toalmost

20,000tonnes,whileappareltonnagehasgrownby12.4%,

toalmost23,000tonnes.Holdingthistradelaneback

wasmachinery&machineryparts,forwhichtonnagehas

decreasedby8.9%overthesameperiod.ForIndia-EU

freight,tonnageofapparel,leathergoods,electronicsand

pharmaceuticalswerealldownforJanuary-August2015

comparedtothesameperiodin2014.




Contents

44

Air Freight Fastest Growing Trade Lanes – Emerging Market to EU/US (Index of Tons, 2005=100)

Rank Origin Destination 2014 Tons 2015* Tons

14-15 Growth

2012 Index

2013 Index

2014 Index

2015 Index*

2012-2015 CAGR

2005-2015 CAGR

1 Ethiopia EU 57,615 89,398 55.2% 827 1,009 1,116 1,732 27.9% 33.0%

2 Vietnam US 65,159 90,702 39.2% 150 192 236 328 29.8% 12.6%

3 Bangladesh US 13,673 18,852 37.9% 110 189 96 133 6.4% 2.9%

4 Turkey EU 55,829 76,219 36.5% 122 111 118 160 9.5% 4.8%

5 Sri Lanka US 16,537 21,868 32.2% 88 104 102 135 15.1% 3.0%

6 Chile EU 45,158 54,844 21.5% 313 262 236 286 -2.9% 11.1%

7 Turkey US 21,802 25,378 16.4% 89 101 123 144 17.5% 3.7%

8 Philippines US 31,765 36,784 15.8% 58 63 86 99 19.6% -0.1%

9 Indonesia US 33,944 38,528 13.5% 87 84 91 103 5.6% 0.3%

10 China US 1,194,106 1,344,115 12.6% 130 128 150 168 9.1% 5.3%

11 Thailand US 63,397 69,994 10.4% 84 82 84 93 3.5% -0.7%

12 Ecuador US 47,310 52,223 10.4% 97 96 90 100 1.0% 0.0%

13 Egypt EU 45,155 49,817 10.3% 159 107 111 123 -8.4% 2.1%

14 India US 116,528 127,457 9.4% 113 111 120 131 5.1% 2.8%

15 Philippines EU 15,111 16,521 9.3% 67 64 72 79 5.6% -2.3%

16 Malaysia US 47,629 52,071 9.3% 35 38 39 43 6.6% -8.1%

17 Brazil US 38,622 41,887 8.5% 56 41 42 45 -6.6% -7.6%

18 Peru US 106,250 114,673 7.9% 141 153 162 174 7.4% 5.7%

19 Bangladesh EU 59,905 64,223 7.2% 167 222 162 174 1.3% 5.7%

20 Vietnam EU 51,619 54,601 5.8% 167 220 236 249 14.3% 9.6%

21 Mexico EU 77,410 81,242 5.0% 160 169 194 204 8.4% 7.4%

22 Kenya EU 196,060 204,888 4.5% 231 280 294 307 10.0% 11.9%

23 Ecuador EU 26,581 27,599 3.8% 308 294 332 345 3.8% 13.2%

24 Uganda EU 29,517 30,043 1.8% 98 150 139 142 13.0% 3.6%

25 Cambodia EU 11,966 11,933 -0.3% 217 300 344 343 16.5% 13.1%

n/a All 45 EM EU 2,695,843 2,455,204 -8.9% 109 124 137 124 4.6% 2.2%

n/a All 45 EM US 2,246,903 2,453,996 9.2% 109 110 120 131 6.5% 2.8%

n/a All 45 EM EU and US 4,942,746 4,909,200 -0.7% 109 117 129 128 5.5% 2.5%





Contents

45

Outofthe43emergingmarketairfreighttradelanesto

theEU/USforwhichvolumesexceeded10,000tonnes,

only24areexpectedtoincreasetheirtonnagein2015.

However,sometradelanesarestillpredictedstrong

performances,highlightedbyEthiopia-EUandVietnam-

US,asdescribedintheprevioussection.Infact,13trade

lanesareforecastdouble-digitgrowthfor2015.

Onerelativelylargeemergingmarketwhichperformed

wellwasTurkey.Turkey-EUairfreighttonnageisexpected

toriseby36.5%in2015,mainlythankstohighervolumes

ofchemicalproductsandmachinery&machinery

parts.Turkey-USairfreightisforecastgrowthof16.4%,

primarilyduetogreaterexportsofapparel,machinery&

machinerypartsandfish.

Turkeywasoneofjustfiveemergingmarketsthatappear

twiceinthetop25fastestgrowers,theothersbeing

Bangladesh,Ecuador,PhilippinesandVietnam.

Bangladesh’sexportsaredominatedbyapparel.It

accountedforapproximately90%ofairfreighttonnageto

theEUandUSin2014.ForJanuary-August2015,apparel

tonnagewasupby52.1%year-over-yeartotheUS,while

fortheEUthecorrespondingfigurewas4.2%.

Ecuador’sexportprofileisalsoalmostentirelybased

onasingleproductgroup,flowers,whichaccountedfor

around75%ofairfreighttotheUSandabout90%to

theEU,in2014.ForJanuary-August2015,tonnagewas

upby7.3%year-on-yeartotheUS,whilefortheEUthe

figurewas2.9%.Ecuadorislookingtobecomearegional

transhipmenthubforflowers,takingtrafficfromthelikes

ofColombiaandPeru,havingreplacedtheoldairportin

Quitoin2013withafacilitythathasthelongestrunwayin

LatinAmericaand10,000sqmofmoderncoldstorage

facilities.However,thisambitionisbeinghamperedbythe

impositionofa45%importtax.Theairport’sbusiness

developmentdirectorhasstated,“Thegovernmentthinks

it’sprotectingnationalprofit,butit’sabigmistake.It’s

verybadforcargo.Theaircraftleavefullofflowers,

buttherearealmostnoimports.Thatmakesexporting

flowersveryexpensive.Weneedmoreimportstobalance

thepriceofexports.”Ecuador’sonlyothersignificantair

exportisfish(onlytotheUS,accountingforabout20%

oftonnagein2014).VolumestotheUSwereupby25.1%

year-on-yearforJanuary-August2015.

ForthePhilippines,airexportstotheUSwilldevelop

particularlystrongly(15.8%growthforecastfor2015)on

thebackofelectronicsandmachinery&machineryparts

growth.Asimilarstoryholdstrueforfreightboundforthe

EU,albeitgrowthispredictedtobeweakeratjust9.3%.

ForVietnam,itsairfreightgrowthof39.2%tothe

UShasalreadybeenoutlinedintheprevioustop10

section.ForVietnam-EU,tonnagegrowthfor2015will

bemoremodestat5.8%.Bycommodity,itisevident

thatelectronicsexportswillgrowstrongly,withvolumes

upby36.4%forJanuary-August2015,comparedtothe

sameperiodin2015.Overthesameperiod,machinery&

machineryparts(9.1%)willalsoregisterdecentgrowth,

butoverallperformancewillbeheldbackbyapparel

(-19.7%)andfootwear(-12.3%).

Someotherverystronggrowersin2015arepredicted

tobeSriLanka-US(32.2%)andChile-EU(21.5%).For

SriLanka-US,appareltonnageincreasedby76.4%for

January-August2015year-on-yearandmadeuparound

70%ofalltonnagein2014.Disappointingvolumesamong

otherproductgroupssuchasfishoffsetthesegains,

however.Chile-EUairfreightisdominatedbycopper

products(over60%ofallfreightin2014),whichwereup

by5.6%forJanuary-August2015year-on-year.




Contents

46


1 US China 83,479,512 78,450,667 -6.0%

2 EU China 38,793,102 42,424,053 9.4%

3 EU Turkey 30,976,238 30,392,534 -1.9%

4 EU Algeria 23,527,358 23,584,683 0.2%

5 EU Saudi Arabia 13,326,139 15,993,938 20.0%

6 US Mexico 14,809,684 15,990,840 8.0%

7 EU Egypt 16,135,216 15,941,231 -1.2%

8 EU Morocco 11,726,469 11,671,493 -0.5%

9 US Colombia 9,413,399 10,514,592 11.7%

10 EU Brazil 11,712,876 10,492,615 -10.4%

n/a EU All 45 EM 231,659,176 236,715,779 2.2%

n/a US All 45 EM 201,359,333 190,342,195 -5.5%

n/a EU and US All 45 EM 433,018,509 427,057,974 -1.4%

Sea Freight Top 10 Trade Lanes – EU/US to Emerging Market


Sea Freight EU/US to Emerging Market Top 5 Trade Lanes 2005-2015 Growth


400

350

300

250

200

150

100

50

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2005 2006 2007 2008 2009 2010 2011 2012 20142013 2015*

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EU-China EU-Turkey EU-Algeria EU-Saudi Arabia




Contents

47

Unlikeairfreight,wherebyverystrongEuropeangrowth

willcomfortablyoffsetaslightdeclineinUSexports

in2015,thestoryofseafreightisonewherebytepid

Europeangrowthwillnotbesufficienttooutweighthe

impactofdecliningUSexports.Overall,seafreight

tonnagetoemergingmarketsfromtheEUandUSis

predictedtodeclineby1.4%in2015.EUtonnagewill

increaseby2.2%,whileUSvolumeswilldropby5.5%.

Howwillthetop10farein2015?Plentyofvariation

isanticipatedasfivemarketsaresettoincreasetheir

volumes,whereasfivewillsufferdeclines.

Startingwiththelargest,US-Chinatonnageisexpected

toshrinkby6.0%,withexportsofsoybeanslikely

tosufferanannualdeclineinvolumeintherangeof

10%.Soybeansconstitutedalmost40%ofUSsea

exporttonnagetoChinain2015.Keymanufacturing

sectorssuchasvehicles&vehicleparts(-19.9%)and

machinery&machineryparts(-4.7%)havealsosuffered

sofarin2015(fromJanuary-August2015).EU-China

seafreight,however,issettoexpandbyaround9.4%.

Woodpulp–whichaccountedforover20%ofvolume

in2014–isexpectedtoincreaseitstonnagemarkedly,

withJanuary-August2015growthof11.2%year-on-

year.Othercommoditisedsectorssuchascerealcrops

andwoodproductshavealsodonewelloverthesame

period.Conversely,incorehigh-valuemanufacturing

sectorssuchasvehicles&vehicleparts(-14.9%)and

machinery&machineryparts(-6.4%),tonnagevolumes

arepredictedtodecrease.

Unsurprisingly,manyemergingmarketsinrelativelyclose

geographicalproximitytotheEUfeatureinthetop10.

ForEU-SaudiArabiaseafreight,tonnagegrowthofover

20%isforecastfor2015.Exportsofcerealcrops(around

aquarterofalltonnagein2014)havegrownbyover50%

forJanuary-August2015,comparedtothesameperiodin

2014.Inaddition,machinery&machinerypartstonnage

hasexpandedby19.8%overthesameperiod,indicating

strongdemandfromSaudiArabia’smanufacturingsector.

ForEUexportstoTurkey,Algeria,EgyptandMorocco,

volumeswillbemoreorlessflatin2015compared

to2014,althoughthisdisguisesplentyofvariationin

growthofdifferentcommodities.EU-Turkeyseafreight

ispredictedtocontractby1.9%.Ironandsteelexports,

whichconstitutedalmosthalfoftonnagein2014,have

decreasedby10.8%forJanuary-August2015.Growth

invehicles&vehicleparts,machinery&machinery

parts,fertilisersandfoodresiduesoverthesameperiod

willoffsetsomeofthisdecline.EU-Algeriatonnageis

estimatedtobevirtuallyflatin2015comparedto2014.

Growthincerealstonnage(11.5%)hasbeenoffsetby

declinesiniron&steel(-7.4%)andsalt,sulphur,earths

&stone(-12.6%).ForEU-Egypt,thestoryisvirtuallya

mirrorofEU-Algeria,exceptthatthegrowthratesare

muchmoreextreme(intherangeof40-50%).EU-

MoroccoseafreightforJanuary-August2015hasbeen

astoryoffallingcerealcroptonnage(-25.7%),though

thishaslargelybeenoffsetbygrowingtonnageacrossa

rangeofproductgroups.

US-Mexico,anotherrelativelyshort-distancetrade

lane,issettoexpanditstonnageby8.0%in2015.For

January-August2015,tonnageofcerealcrops(which

representaround40%oftotalvolume)hasincreasedby

9.2%year-on-year,soybeans(about10%oftotalvolume)

areup15.0%,whileorganicchemicals(around25%of

totalvolume)aredownby3.9%.US-Colombiafreight

ispredictedtogrowby11.7%in2015.Aroundhalfof

tonnageisaccountedforbysoybeans,whichwilldisplay

moderategrowthin2015.Finally,EU-Brazilseafreight

isforecasttodecreaseby10.4%in2015.Chemical-

relatedfreightisexpectedtotakeahit,withtonnageof

fertilisersandinorganicchemicalsdownby7.7%and

12.6%respectivelyforJanuary-August2015.Perhaps

moreworryingly,thehigh-valuesectorsofmachinery&

machinerypartsandvehicles&vehiclepartshaveboth

experiencedtonnagedeclinesofaround25%overthe

sameperiod.




Contents

48


2012 Index

2013 Index

2014 Index

2015 Index*

2012-2015 CAGR

2005-2015 CAGR

1 EU Bangladesh 968,409 2,008,741 107.4% 155 178 219 455 43.2% 16.4%

2 US Pakistan 793,664 1,401,385 76.6% 142 143 139 246 20.1% 9.4%

3 EU Oman 713,669 1,137,257 59.4% 270 242 227 361 10.2% 13.7%

4 EU Kenya 725,906 1,142,790 57.4% 152 172 195 308 26.4% 11.9%

5 EU Thailand 3,959,650 5,051,638 27.6% 195 206 176 225 4.8% 8.4%

6 EU Mexico 4,430,595 5,392,776 21.7% 118 119 118 144 7.0% 3.7%

7 EU Peru 905,379 1,099,538 21.4% 244 204 190 231 -1.9% 8.7%

8 EU Saudi Arabia

13,326,139 15,993,938 20.0% 139 172 149 178 8.5% 6.0%

9 EU Argentina 1,710,009 1,985,466 16.1% 169 157 145 168 -0.2% 5.3%

10 US Morocco 1,300,279 1,493,785 14.9% 102 93 103 119 5.1% 1.7%

11 US Saudi Arabia

3,969,234 4,472,804 12.7% 179 160 213 240 10.3% 9.2%

12 EU Colombia 2,456,893 2,753,206 12.1% 157 164 235 263 18.7% 10.2%

13 US Colombia 9,413,399 10,514,592 11.7% 82 100 170 190 32.3% 6.6%

14 US Thailand 4,155,070 4,615,921 11.1% 134 111 153 169 8.1% 5.4%

15 EU China 38,793,102 42,424,053 9.4% 213 220 222 243 4.5% 9.3%

16 EU Tunisia 4,033,191 4,407,148 9.3% 106 136 116 127 6.0% 2.4%

17 US Mexico 14,809,684 15,990,840 8.0% 126 114 121 131 1.3% 2.7%

18 EU Lebanon 2,310,856 2,487,303 7.6% 170 197 188 202 6.0% 7.3%

19 EU India 9,088,598 9,762,656 7.4% 150 116 130 139 -2.4% 3.4%

20 EU South Africa 4,776,783 5,092,408 6.6% 143 155 154 164 4.7% 5.1%

21 US Chile 3,198,637 3,355,589 4.9% 250 267 223 234 -2.1% 8.9%

22 EU Philippines 1,580,572 1,656,699 4.8% 143 159 199 208 13.3% 7.6%

23 EU Kuwait 1,212,954 1,267,852 4.5% 99 110 125 131 9.8% 2.7%

24 EU UAE 7,104,911 7,375,776 3.8% 172 182 182 189 3.1% 6.5%

25 EU Jordan 2,272,126 2,335,110 2.8% 126 163 188 193 15.2% 6.8%

n/a EU All 45 EM 231,659,176 236,715,779 2.2% 166 176 180 184 3.4% 6.3%

n/a US All 45 EM 201,359,333 190,342,195 -5.5% 179 186 194 183 0.8% 6.3%

n/a EU and US All 45 EM 433,018,509 427,057,974 -1.4% 172 181 186 184 2.2% 6.3%

Sea Freight Fastest Growing Trade Lanes – EU/US to Emerging Market (Index of Tons, 2005=100)





Contents

49

Outofthe55tradelaneswithvolumesofatleast1m

tonnes,29areexpectedtorecordhighervolumesin2015

thanin2014.Thereare14lanespredictedtoseedouble-

digitgrowth,ofwhicheightareexpectedtohavegrowth

ofover20%.

Forallthetradelanesinthetop10withEUorigin,growth

isoverwhelminglybeingdrivenbyhighervolumesof

cerealcrops,exceptforEU-Argentina,wherehigher

volumesofsalt,sulphur,earths&stonearetheprimary

cause.Specifically,wheatandbarleyexportsaredriving

mostofthegrowth.TheEUistheworld’sbiggestgrower

ofwheatanditwillachievearecordharvestin2015,

withstockpilessettorisetoaseven-yearhigh.Giventhe

supplyglut,pricesarelowandincombinationwiththe

favourableexchangerate,thishasstimulatedsignificant

additionalexportvolumesin2015,toawiderangeof

emergingmarkets.

Inasimilarvein,US-Pakistangrowthof76.6%canbe

attributedtovolumesofsoybeansrisingfromvirtually

nothingin2014,toover300,000tonnesforJanuary-

August2015.

Lookingspecificallyatsomeofthelargertradelanes

(over10mtonnes),EU-SaudiArabiagrowthof20.0%in

2015willcomeonthebackofhigherwheatandbarley

tonnage,withcerealcropvolumesupby53.1%for

January-August2015comparedtothesameperiodin

2014.Overallgrowthwillbestuntedbylessimpressive

volumedevelopmentsinothercommoditygroups.

ForUS-Colombia,growthof11.7%isanticipated,again

onthebackofhighercerealstonnage,whichcomprises

approximatelyhalfoftotaltonnage.Additionalstimulus

willcomefromhigherfoodresidue&wastevolumesand

organicchemicals.

Finally,US-Mexicovolumeswillincreasetoalmost16m

tonnesin2015(8.0%growth)ascerealstonnage,which

accountedforaround40%oftotalvolumesin2014,has

increasedby9.2%forJanuary-August2015,year-on-

year.Overthesameperiod,organicchemicalstonnage,

whichrepresentedoveraquarterofthetotalin2014,has

shrunkby3.9%.




Contents

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2005 2006 2007 2008 2009 2010 2011 2012 2013 2015*2014

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China-EU Russia-EU Brazil-EU Ukraine-EU


1 China US 62,904,959 67,571,275 7.4%

2 China EU 52,196,353 54,189,588 3.8%

3 Russia EU 29,295,372 30,667,079 4.7%

4 Brazil EU 27,665,552 28,981,323 4.8%

5 Ukraine EU 21,333,682 21,943,181 2.9%

6 Mexico US 18,502,997 18,935,792 2.3%

7 Turkey EU 16,875,363 17,256,738 2.3%

8 Brazil US 16,619,229 16,695,746 0.5%

9 Argentina EU 12,577,510 13,500,271 7.3%

10 Chile US 11,225,212 11,983,196 6.8%

n/a All 45 EM EU 258,860,857 260,848,096 0.8%

n/a All 45 EM US 172,913,917 180,377,702 4.3%

n/a All 45 EM EU and US 431,774,774 441,225,798 2.2%

Sea Freight Top 10 Trade Lanes – Emerging Market to EU/US

Sea Freight Emerging Market to EU/US Top 5 Trade Lanes 2005-2015 Growth






Contents

51

AswithemergingmarketexportstotheEUandUSbyair,

theUSisexpectedtorecordhigherseafreightvolume

growththantheEUin2015.However,thedisparityis

muchlower,just3.5percentagepointsforsea,compared

to18.1forair.Theupshotisthatemergingmarketsea

freightexporttonnagetotheEUandUSisexpectedto

increasebyjust2.2%in2015.

Outofthe90tradelanesgoingfromthe45emerging

marketstotheEUandUS,thetop10areforecastto

constitute63.9%oftotaltonnagein2015.Chinaalonewill

accountfor27.6%oftonnage.However,thisdisguises

China’sgreaterimportancetotheUS,comparedto

Europe.China-UStonnageisforecasttorepresent

37.5%ofalltonnagetotheUS,whereasfortheEUthe

correspondingfigureisjust20.8%.

Anothersalientfeatureofemergingmarketseafreight

exportsisthattheyaremuchmorediversifiedcompared

toimports,whichareoverwhelminglycomprisedof

agriculturalgoods.Suchvariationholdsgenerallyacross

theboardforemergingmarketexports,butChinais

perhapsthebestexampleofit.

In2014,thetop10productgroupsbytonnagefor

China-USseafreightwerefurniture(6.4m),machinery&

machineryparts(5.8m),electronics(4.7m),iron&steel

articles(3.6m),plastics&plasticarticles(3.5m),iron&

steel(2.8m),vehicles&vehicleparts(2.6m),toys,games

&sportsequipment(2.6m),ceramicproducts(2.5m)and

salt,sulphur,earths&stone(2.2m).Moreover,21different

productgroupshadvolumesinexcessof1mtonnes.

Overall,China-USexporttonnageisexpectedtoincrease

by7.4%in2015.ForJanuary-August2015,someproduct

groupswhichhaverecordedstrongtonnagegrowthyear-

on-yearincludefurniture(11.7%),electronics(7.7%),iron

&steelarticles(13.0%),vehicles&vehicleparts(9.7%)

andtoys,games&sportsequipment(9.2%).Ontheother

hand,exportgrowthofthefollowingproductgroupswas

lessimpressive:machinery&machineryparts(0.6%),

iron&steel(-4.2%),ceramicproducts(-9.7%)andrubber

&rubberarticles(-13.2%).

ForChina-EUseafreight,thetop10productgroups

bytonnagein2014were:machinery&machineryparts

(5.9m),iron&steel(4.9m),electronics(3.9m),furniture

(3.5m),iron&steelarticles(3.3m),stonearticles(2.8m),

wood&woodarticles(2.2m),plastics&plasticarticles

(2.2m),organicchemicals(1.6m)andvehicles&vehicle

parts(1.4m).Intotal,exportvolumesin17different

productgroupswereabove1mtonnes.Onthewhole,

China-EUtonnageisanticipatedtoriseby3.8%in2014.

ForJanuary-August2015,year-on-yearexportgrowth

wasparticularlystrongforwood&woodarticles(64.7%),

ironandsteel(36.1%)andelectronics(13.6%).Some

poorperformingproductgroupswerestonearticles

(-6.4%),machinery&machineryparts(-3.7%),and

vehicles&vehicleparts(-6.0%).

Elsewhere,thetwotradelanesinvolvingCISmarketsin

thetop10–Russia-EUandUkraine-EU–arepredicted

tohavemoderategrowthof4.7%and2.9%respectively,

in2015.ForJanuary-August2015,year-over-yeargrowth

inRussianexportsofironandsteel(18.9%to6.3m

tonnes)andfertilisers(11.1%to2.7mtonnes)hasbeen

particularlystrong.Anothershorttradelane,Turkey-EU,

isforecastgrowthof2.3%in2015.Automotivetradewill

beespeciallystrong.Vehicles&vehiclepartsexportsfor

January-August2015amountedtoalmost1mtonnes,up

by32.0%.

Alltheremainingtradelanesinthetop10involve

emergingmarketsintheAmericas.Brazil-EUtonnage

isanticipatedtoriseby4.8%in2015,thankstovery

stronggrowthinironandsteel,andmoderategrowth

inimportantbulksectorssuchasfoodresiduesand

woodpulp.Moreworryingly,machinery&machinery

partsexportsaredownby16.2%year-on-yearfor

January-August2015.Mexico-USfreightisexpected

toincreaseby2.3%in2015,withsalt,sulphur,earths

&stonetonnage(about75%oftotaltonnage)upby

8.4%year-on-yearforJanuary-August2015.Vehicles

&vehiclepartsexportsareupby14.9%overthesame

period.Brazil-USfreightwillremainmoreorlessflat,as

decentgrowthinironandsteelvolumeswillbeoffsetby

declineselsewhere.Argentina-EUtradeisexpectedto

riseby7.3%in2015onthebackoffoodresiduesand

wastetonnagegrowthofabout10%(around75%oftotal

tonnagein2014).Finally,Chile-UStonnageisexpected

toincreaseby6.8%in2015.Salt,sulphur,earths&stone

exportsforJanuary-August2015haveincreasedby

8.0%year-on-year(70.8%oftotaltonnagein2014),while

exportsoffruithaveincreasedby7.0%overthesame

period(7.7%oftotaltonnagein2014).




Contents

52


2012 Index

2013 Index

2014 Index

2015 Index*

2012-2015 CAGR

2005-2015 CAGR

1 Uruguay EU 1,728,892 2,710,594 56.8% 114 144 114 179 16.3% 6.0%

2 Oman US 836,393 1,310,574 56.7% 2,545 1,829 1,741 2,729 2.4% 39.2%

3 Turkey US 4,255,757 5,539,745 30.2% 83 81 117 152 22.7% 4.3%

4 UAE US 1,177,501 1,491,569 26.7% 81 124 176 222 39.9% 8.3%

5 Colombia EU 1,557,219 1,868,721 20.0% 137 108 108 129 -1.9% 2.6%

6 Argentina US 1,698,847 1,947,697 14.6% 77 123 82 94 7.2% -0.6%

7 Saudi Arabia EU 3,490,392 4,001,566 14.6% 139 139 134 154 3.4% 4.4%

8 Bangladesh EU 912,614 1,027,489 12.6% 141 160 181 204 13.2% 7.4%

9 Thailand US 3,434,677 3,824,159 11.3% 51 48 50 56 3.2% -5.7%

10 Nigeria EU 1,068,633 1,185,190 10.9% 126 144 323 358 41.6% 13.6%

11 UAE EU 1,427,377 1,572,582 10.2% 250 256 288 317 8.3% 12.2%

12 Vietnam US 3,816,821 4,181,880 9.6% 274 291 319 350 8.5% 13.3%

13 Saudi Arabia US 1,304,565 1,426,021 9.3% 94 90 99 108 4.8% 0.8%

14 Qatar US 1,539,987 1,657,412 7.6% 75 148 194 209 40.9% 7.6%

15 Indonesia US 4,211,389 4,530,398 7.6% 78 93 96 104 10.0% 0.4%

16 China US 62,904,959 67,571,275 7.4% 99 103 115 123 7.5% 2.1%

17 Argentina EU 12,577,510 13,500,271 7.3% 84 69 69 74 -4.1% -3.0%

18 India US 6,607,621 7,081,060 7.2% 114 109 135 145 8.3% 3.8%

19 Chile US 11,225,212 11,983,196 6.8% 84 90 142 151 21.6% 4.2%

20 Malaysia EU 5,303,888 5,661,567 6.7% 82 81 98 104 8.4% 0.4%

21 Tunisia EU 2,394,298 2,535,495 5.9% 81 84 69 74 -3.1% -3.0%

22 Morocco EU 5,658,166 5,937,524 4.9% 61 60 63 66 2.3% -4.1%

23 Brazil EU 27,665,552 28,981,323 4.8% 89 141 84 88 -0.3% -1.3%

24 Russia EU 29,295,372 30,667,079 4.7% 92 88 105 110 6.2% 0.9%

25 Ecuador US 1,499,992 1,561,609 4.1% 95 98 103 107 4.0% 0.7%

n/a All 45 EM EU 258,860,857 260,848,096 0.8% 101 107 110 110 3.0% 1.0%

n/a All 45 EM US 172,913,917 180,377,702 4.3% 88 93 107 111 8.1% 1.1%

n/a All 45 EM EU and US 431,774,774 441,225,798 2.2% 96 101 108 111 5.0% 1.0%

Sea Freight Fastest Growing Trade Lanes - Emerging Market to EU/US (Index of Tons, 2005=100)





Contents

53

ForemergingmarkettoEU/USseatradelanes,many

ofthebestgrowthratesforecastfor2015havebeen

attributedtosomeofthesmallesttradelanes.Ofthe90

tradelanes,only53arepredictedtohavevolumesin

excessof1mtonnes(excludedfromthetop25ranking).

Amongthetop10fastestgrowers,sixhavevolumesin

therangeof1-2mtonnes.

ForUruguay-EU,tonnagegrowthof56.8%isexpected

for2015,thankstoverystronggrowthinexportsof

woodpulpandsoybeans.ForOman-EUfreight,growth

of56.7%ispredicatedonchemical-relatedexports,

withorganicchemicalsandfertiliserssparkingmostof

thegrowth.Growthinexportsoffertiliserswillalsobe

behindmuchofUAE-USgrowth(26.7%overallin2015).

Turkey-USseafreightispredictedtoriseby30.2%in

2015.ForJanuary-August2015,tonnageofstonearticles

(about20%oftotaltonnage)andiron&steel(about40%

oftotaltonnage)hasincreasedby22.4%and58.0%

respectively.Colombia-EU(20.0%growthin2015)is

theonlyothertradelanepredictedtogrowbyatleast

20%.ForJanuary-August2015,exporttonnageoffruit

hasincreasedby30.7%year-on-year,toalmost720,000

tonnes.

Turningtosomerelativelyhightonnagetradelaneswith

theEUasadestination,chemicalproductsappearto

bebehinddecentgrowthforanumberoftrades.Saudi

Arabia-EUvolumesareexpectedtoincreaseby14.6%

toover4mtonnesin2015.ForJanuary-August2015,

organicchemicalsandplastics&plasticarticleshave

grownby21.4%and9.9%year-on-year,respectively.

Bothproductgroupsaccountforapproximately50%of

totalexports.ForMalaysia-EU,growthof6.7%isforecast

for2015,thankstoverystronggrowthintonnageof

miscellaneouschemicalproductsandoils.Morocco-

EUwillseegrowthofjust4.9%in2015,butinorganic

chemicalstonnageisupalmost30%forJanuary-August

2015year-on-year.

Finally,aninspectionofsomeofthelargerUStrade

lanesrevealsthatcertainAsiaPacificoriginmarketswill

farewellin2015.ForVietnam-USseafreight,tonnage

growthof9.6%ispredicted.Furnitureexports(over

aquarteroftotaltonnagein2014)wereupby21.6%

forJanuary-August2015year-on-year.Overthesame

period,apparelvolumes(over10%oftotaltonnage)

wereup13.4%,whilefootwear(6%oftonnage)wasup

by23.9%.Elsewhere,Indonesia-USgrowthof7.6%in

2015islargelybasedonstronggrowthofrubber&rubber

articlesandoilstonnage,whichhaveincreasedby7.4%

and16.1%respectivelyforJanuary-August2015,year-

on-year.Lastly,India-UStonnageissettogrowby7.2%

in2015,withgrowthcomingfromarangeofproduct

groups.ForJanuary-August2015,tonnagegrowthof

textilearticles(15.3%),stonearticles(29.8%),iron&steel

articles(27.0%),machinery&machineryparts(20.4%)

andvehicles&vehicleparts(19.7%)hasbeenparticularly

impressive.




Contents

54

The 2016 Agility Emerging Markets Logistics Index Survey

Toexaminethepotentialoftheworld’smostpromising

emerginglogisticsmarketsandtomeasuretheimpacts

ofthetrendsseenacrosstheglobaleconomyonthe

developmentandemergenceofthesemarkets,Transport

Intelligenceundertookasurveyoflogisticsindustry

professionalsbetweenAugustandNovember2015.

Participantsfromarangeoflogisticsmarketsandvertical

sectorstookpart,offeringinsightandopinionfromtheir

exposuretoemergingmarkets.Responsesfrom1,118

industryprofessionalsareusedinthis,theseventhannual

editionoftheAgilityEmergingMarketsLogisticsIndex

Survey.

Eigh

t




Contents

55

16%

14%

12%

10%

8%

6%

4%

2%

0%

China

India

Brazil

Indon

esia

Vietna

m

Mex

ico

RussiaUAE

South

Afri

ca

Turk

ey

Thail

and

Mala

ysia

Saudi A

rabia

Iran

Nigeria

Philip

pines

Qatar

Bangla

desh

Kenya

Egypt

% o

f res

po

nden

ts

Country 2016 2015 Change

India 1 2 up 1

China 2 1 down 1

Brazil 3 3 -

Indonesia 4 4 -

Vietnam 5 5 -

Mexico 6 6 -

UAE 7 8 up 1

Russia 8 7 down 1

South Africa 9 9 -

Malaysia 10 12 up 2

Turkey 11 10 down 1

Nigeria 12 14 up 2

Saudi Arabia 13 13 -

Thailand 14 11 down 3

Iran 15 27 up 12

Qatar 16 16 -

Philippines 17 15 down 2

Bangladesh 18 18 -

Egypt 19 20 up 1

Kenya 20 22 up 2

Perceived Major Logistics Markets of the Future

Which of the following countries do you believe have the most potential to grow as logistics markets in the next five years? Please rank.






Contents

56

Surveyrespondentswereaskedtorankthefiveemerging

marketstheyviewedasthemostlikelytobecomemajor

logisticsmarketsoverthenextfiveyears.Ascorewas

calculatedinordertorankthemarkets–afirstpreference

wasawardedfivepoints,asecondpreferencefourpoints,

andsoondowntoasinglepointforthefifthpreference.

Usingthismethod,surveyrespondentsrevealedthatthe

slowdownseeninChina’seconomyhasunderminedits

positionasthemostattractiveemergingmarket,with

Indiareplacingitatthetopoftherankings.

Theswitchatthetopoftherankingsundoubtedlyhas

severaldrivers.InIndia,whereeconomicgrowthis

expectedtoexceedthatofChinauntilatleast2020,

manylogisticsexecutives,theseresultssuggest,will

bepayingcloseattentiontothedepth,breadthand,

perhapsmostsignificantly,thepaceofreformstheModi

governmentcanenact.Meanwhile,theslowingChinese

economywillhaveplayedapartinthechangedranking,

butsotoowillthemarket’salreadyestablishedposition

withinsupplychains.Chinaisnolongeranautomatic

choiceforlow-costmanufacturingandcheaplabour.It

mustcompetewithneighbouringandnearbymarkets,

suchasIndonesia,MalaysiaandVietnam,thatcanoffer

similar,andsometimesmoresignificant,costadvantages

tomanufacturersandproducers,particularlyinindustry

sectorswherethesecompetingmarketshavedeveloped

specialisations.Suchdecisionstolocateoutsideof

Chinaappearevenmorecommonwhenpresencein

theChinesemarketisalreadyestablished.Socalled

‘China+1’strategiesareseeingmanufacturerscreating

regionallydispersedproductionmodels,allowingthemto

bothspreadriskacrossseverallocationsandcreatethe

mosteconomicallyviablecostprofiles.

Therewasgeneralcontinuityyear-on-yearthroughout

therestofthetop10,althoughUAEdidrisetoseventh,

attheexpenseofRussia.Aftergainsin2015,Thailand

andthePhilippinesbothslippeddowntherankings,but

Malaysiarosetwospotstoclaim10th.Thailand’sslip

to14thpositionsawitlosethegainsitmadein2015,as

economicgrowthratesfailedtoliveuptothecountry’s

potentialfollowingweaker-than-expectedexportsand

privatespending,andpoliticaluncertaintyexerted

furtherdownwardpressureongrowth.Amorepositive

storycanbefoundinMalaysiawhichenteredthetop10,

havinggainedtwoplacesthisyeartoaddtotheriseit

achievedin2015.Higherdomesticdemandcombined

withasustainedexpansionintheservice,manufacturing

andconstructionsectorsbenefiteditsgrowthandpartly

offsetthedragofcheaperoilprices.Lowercommodity

pricesboostedmanufacturingexports,contributingto

realexportsofgoodsandservicesgrowthof5.1%in

2014.Arevivalintheelectronicssectoralsocontributed

tothehigherexportvolumes.

SurveyrespondentsrankedBrazilasthethirdmost

attractiveemerginglogisticsmarket,highlightingan

enduringappealinLatinAmerica’slargesteconomy,

despitesignificantdifficulties.Thesuggestionhereis

thatthemarket,andthepotentialitholdsforlogistics

serviceproviders,willrecoverfromtherecessionit

enteredin2015.Itappearsthosesurveyedhavefaith

inBrazil’sdomesticmarketandthatitssizeablemiddle

classpopulationwillonceagainbeencouragedtospend,

investandstartbusinesses.Surveyrespondentsare

likelytohavefaithtoothatthecountry’swelldeveloped

agriculture,mining,manufacturingandservicesectors

willbecomeincreasinglycompetitiveandproductive.

ThepaceandscaleofprogressBrazilmakesoverthe

courseof2016iscertaintodeterminewhetheritretains

itshighrankinginthefuture,justasitwillinIran.The

liftingofsanctionsagainstthestateduring2015has

seentheIranianlogisticssectorclimb12placestorank

asthe15thmostpromisingemerginglogisticsmarket.

Iran’soil&gasindustrylookssettoreceiveaboostof

FDI,withopportunitiesforLSPs,eveninthecurrent

eraoflowoilprices,whilethecountry’stradewiththe

UAE,animportantre-exportinglocation,issettojump

$13bnfollowingtheremovalofsanctions.Iranalsohas

adiversifiedmanufacturingbaseandgrowingmiddle

class,bothofwhicharelikelytobeinterestingtologistics

serviceproviders.




Contents

57

35%

30%

25%

20%

15%

10%

5%

0%

Econo

mic

Growth

Fore

ign D

irect

Inves

tmen

t

Growing

Trad

e

Volum

es

Cheap

Lab

our

Forc

e

Poten

tial

Consu

mer

Spen

d

Geogr

aphic

Loca

tion

Growing

Popula

tion

Good B

usine

ss

Enviro

nmen

t

Strong

Tran

spor

t

Infra

stru

ctur

e

Near S

ourc

ing

Mar

ket

Lack

of

Corru

ption

Strong

Secur

ity

% o

f res

po

nden

ts

Factors behind the Potential Emergence of Markets

Please rank, in order of importance, the key drivers that make a country an important emerging market.



Factor 2016 2015 Y-o-Y Change

Economic Growth 1 1 -

Foreign Direct Investment 2 2 -

Growing Trade Volumes 3 3 -

Good Business Environment 4 8 up 4

Cheap Labour Force 5 4 down 1

Geographic Location 6 6 -

Strong Transport Infrastructure 7 9 up 2

Potential Consumer Spend 8 5 down 3

Growing Population 9 7 down 2

Near Sourcing Market 10 10 -

Lack Of Corruption 11 11 -

Strong Security 12 12 -




Contents

58

20%

18%

16%

14%

12%

10%

8%

6%

4%

2%

0%

Poor T

rans

port

Infra

stru

ctur

e

Corru

ption

Gover

nmen

t Poli

cies

Difficu

lt Cus

tom

s

Proce

dures

Secur

ity

Difficu

lty S

ettin

g Up/

Doing

Busine

ss

Poor I

T Inf

rast

ruct

ure

Difficu

lty in

Repat

riatin

g Pro

fits

Frau

d

Geogr

aphic

Loca

tion

Human

Righ

ts

Issue

s

% o

f res

po

nden

ts

Problems Associated with Doing Business in Emerging Markets

Please rank, in order of importance, the main problems associated with doing business in emerging markets.



Factor 2016 2015 Y-o-Y Change

Corruption 1 2 up 1

Poor Transport Infrastructure 2 1 down 1

Government Policies 3 3 -

Difficult Customs Procedures 4 4 -

Security 5 5 -

Difficulty In Setting Up And Doing Business 6 6 -

Difficulty In Repatriating Profits 7 8 up 1

Fraud 8 9 up 1

Poor IT Infrastructure 9 7 down 2

Human Rights Issues 10 11 up 1

Geographic Location 11 10 down 1




Contents

59

Economicgrowthremainsbyfarthemostsignificant

factordrivingtheemergenceoflogisticsmarkets,

accordingtosurveyrespondents.Thisshouldnotbe

surprisinggiventhecorrelationbetweenwidereconomic

expansionandgrowingdemandforlogisticsservices,

especiallywhenalliedtotherolegeneraleconomic

growthplaysinencouragingspendingwithinconsumer

markets,pullinglargeramountsofthepopulationinto

themiddleclassandincreasinglevelsofpublicspending

oninfrastructureprojectsandotherpublicservices.

Foreigndirectinvestmentagainranked2ndasitsuggests

astrengtheningbusinesscommunityandthepotential

thatmanufacturersandretailersareactivelyinvesting,

increasingcommercialopportunities.Itmayalsobe

thecasethatlogisticsserviceproviderslookingfor

partnershipsorjointventureswithdomesticproviders

viewhigherFDIasanindicatorofgoodbusiness

practiceswithintheemergingmarket.Theriseof‘good

businessenvironment’islikelyrelated,tosomeextent,as

ittoohelpsmitigatesomeoftherisksofinvestment.

Theeconomicturbulenceexperiencedinemerging

marketsoverthelast12months,aswellashighprofile

corruptionscandalsinBrazilandMalaysia,mayalsohave

contributedtotherisingimportanceofagoodbusiness

environment,withthesuggestionthatsurveyrespondents

placeincreasingvalueonfair,openandtransparentlegal

andregulatoryinstitutionswhichcanprotectinvestments,

enforcecontractsandofferrobustcommercialmarkets.

Indeed,theriseofcorruptioninthelistofinhibitors

appearstoreinforcethismessage.Theeffectsof

corruptiononbusinessoperationsareclear.Whetherit

manifestsatthehighestlevels,affectingcontractawards

orinvestmentdecisions,orlurksinday-to-dayoperations

withpaymentsrequiredtoprocessloadsthroughports

orcheckpoints,corruptionfundamentallyreducesthe

capacityoflogisticsserviceproviderstooperateefficient

andprofitablebusinesses.

Overall,though,itappearsgeneraleconomicgrowth

isconsideredapre-requisiteforemergenceasa

logisticsmarket.Withtherestofthedriversrankedvery

closely,however,itisnotclearwhichotherspecific

factorsrespondentslookfor.Thisshouldnotglossover

theirimportance,however.Inacontextofeconomic

turbulenceandchallengingtradeconditions,theclosely

matchedfactorstakeonaddedimportance:where

economicgrowthissimilarbetweenmarkets,itwillbe

thecombination,strengthandattractivenessoftheother

driversthatwillseesomemarketspromotedaboveothers

ininvestmentdecisions.Themoreevenspreadandthe

relativelyhigherproportionsofresponsesaffordedtothe

inhibitorsbysurveyrespondents,suggestthepresence

ofperhapsjustoneortworiskfactorssignificantly

diminishesthepotentialofanemerginglogisticsmarket.




Contents

60

For each of the following regions, please outline which supply chain risk poses the most considerable threat to growth:

Latin America

Asia

Supply Chain Risk

11.2%

4.7%

3.3%

3.2%

3.1% 1.2%

13.3%

18.2%

20.2%

21.6%Economic shocks

Natural disasters

Corruption

Poor infrastructure

Government instability

Other

Terrorism

Piracy

Inventory levels

Cyber attacks

3.0%3.0%

2.8%

2.0%

1.2%

1.4%

12.5%

16.9%

19.3%

37.9%

Corruption


Economic shocks

Poor infrastructure

Natural disasters

Other

Terrorism

Piracy

Cyber attacks

Inventory levels






Contents

61

For each of the following regions, please outline which supply chain risk poses the most considerable threat to growth:

Sub-Saharan Africa


Supply Chain Risk

6.5%

4.5%

2.8%

2.4%

7.1%

8.1%

21.1%

44.7%

Terrorism


Poor infrastructure

Economic shocks

Corruption

Other

Inventory levels

Piracy

Natural disasters

Cyber attacks

0.7%

2.0%

4.0%

6.1%

3.6%

2.7%

1.1%

1.7%

11.1%

15.4%

20.7%

33.7%

Poor infrastructure


Corruption

Terrorism

Piracy

Natural disasters

Other

Economic shocks

Inventory levels

Cyber attacks






Contents

62

Withsupplychainsanevermoreintegralpartof

manufacturingandretailingoperations,theneedto

understand,manageandmitigaterisksinthesupply

chainbecomesvitaliforganisationsaretomaintain

lowinventoryandjust-in-timeproductionschedules.

Surveyrespondentsindicatedthatwhilemacroeconomic

indicatorswereimportant,individualmarketsneededto

beproperlyassessedonamicrolevelifopportunitiesand

risksweretobefullyunderstood.

Asia Pacific

InayearthathasseenChina’seconomyslowandend

arunofunprecedentedgrowththatbeganin1990,as

wellashighdegreesofcurrencyvolatilityacrossthe

region’semergingmarkets,itisperhapsnotasurprise

that21.6%ofsurveyrespondentsratedeconomicshocks

asthenumberonesupplychainriskinAsiaPacific.Due

tothegrowingriskposedbyeconomicuncertaintyinthe

region,naturaldisasterswerepushedinto2ndposition.

AcrossjustfourAsiaPacificcountries–China,India,

thePhilippinesandIndonesia–therehavebeen1,166

weather-relateddisasterssince2005,accordingtothe

UNOfficeforDisasterRiskReduction.Alsopusheddown

therankingwascorruption,whichmovedintothirdoverall

thisyear,perhapsinfluencedbyXiJinping’sleadershipof

China’smuchpublicisedanti-corruptionpurge.

Overall,thetopthreerisksinAsiaPacificaccountfor

60.0%ofthetotalresponses,withtherelativeparity

affordedtoeachsuggestinglogisticsserviceproviders

mustaccountforanumberofequallypressingrisk

factorswhendesigningsupplychains.

Latin America

CorruptionremainedthetopsupplychainriskinLatin

America,whichat37.9%,gainednearlytwicethe

proportionofresponsesas2ndplacedrisk,government

instability.Economicshocksplaced3rd,inayearwhen

theregion’slargesteconomyenteredarecession.

Combined,thesetopthreerisksaccountedfor74.1%of

theresponses.

Theperceptionofpoorinfrastructureasamajorthreatto

growthinLatinAmericahassharplydeclinedamongst

surveyrespondents,however.At12.5%,theproportionof

thosecitingphysicalconnectivityasthemostsignificant

risktosupplychainsintheregionhasfallenfrommore

than20%in2013.Overthisperiod,majorconstruction

initiativeshavetakenplaceinLatinAmerica,includingin

Brazilasitpreparedforitsdutieshostingthe2014World

Cupandthe2016SummerOlympics.


Asinthe2015editionoftheIndex,justtwofactors–

terrorismandgovernmentinstability–dominateas

riskfactorsintheMiddleEast&NorthAfricaregion,

accountingfor65.8%oftheresponses.Theongoing

conflictinSyriaislikelytobeamajorinfluenceinthis–

notonlyhasitcontributedtotheriseofthe‘IslamicState’

group,ithasalsospiltoverintoneighbouringcountries,

withrefugeesfleeingintoTurkey,LebanonandJordan,

amongstothers.

Egypt’sreturntostabilityfollowingtheArabSpringhas

seenmuchoftheoptimism,potentialandinvestment

evidentbefore2011returntothemarketandprovides

evidencethatriskfactorscanbeovercome.

Sub-Saharan Africa

Poorinfrastructure,governmentinstabilityandcorruption

remainthetopthreeriskfactorsinsub-SaharanAfrica,

accordingto69.8%ofsurveyrespondents.Marginally

morethanonethird(33.7%)citepoorinfrastructureand

thelackofphysicalconnectednessastheprimeriskto

supplychainoperationsintheregion.Itwasterrorism,

rated4thwithan11.1%shareoftheresponses,which

appearsanincreasinglysalientriskinthemindsof

respondentshowever,withattacksinKenyaandNigeria

bygroupsincludingal-ShabaabandBokoHaramlikelyto

bedrivingthis.




Contents

63

Country 2016 2015 Y-o-Y Change

Syria 1 2 up 1

Iraq 2 3 up 1

Ethiopia 3 1 down 2

Libya 4 5 up 1

Iran 5 4 down 1

Bangladesh 6 7 up 1

Egypt 7 6 down 1

Algeria 8 10 up 2

Cambodia 9 11 up 2

Papua New Guinea 10 8 down 2

Ukraine 11 13 up 2

Pakistan 12 9 down 3

Uganda 13 12 down 1

Belarus 14 15 up 1

Venezuela 15 16 up 1

Bolivia 16 22 up 6

Brazil 17 28 up 11

China 18 20 up 2

Lebanon 19 14 down 5

India 20 18 down 2

8%

7%

6%

5%

4%

3%

2%

1%

0%

% o

f res

po

nden

ts

Ethiop

iaSyr

iaIra

qIra

nLib

ya

Egypt

Bangla

desh

Papua

New

Guin

ea

Pakist

an

Alger

ia

Cambod

ia

Ugand

a

Ukrain

e

Belaru

s

Bolivia

Vene

zuela

Brazil

China

Leban

onIn

dia

Least Attractive Emerging Logistics Markets

Which of the following countries do you believe have the LEAST potential as emerging logistics markets? Please rank.






Contents

64

Therankingoftheemergingmarketswiththeleast

potentialtoemergeasmajorlogisticsmarketsproduced

manysmallmovementsthisyear.Whiletherankingswere

close,theinsightsderivedfromsurveyrespondentstally

withbroadexpectations.Syria(1st),Iraq(2nd)andLibya

(4th)–threecountriesaffectedbywarandterrorism–

rankhighly,whilethewiderinstabilityintheMiddleEast&

NorthAfricaregionseesitcontributesixofthetopeight

leastattractiveemerginglogisticsmarkets.Includedin

thishighlyrankedgroupedofsixMENAmarketsareIran

(5th)andEgypt(7th),bothofwhichalsomadethetop

20mostattractivemarketslistandbothofwhichfailto

matchmovesupthatrankingwithparallelmovements

downthismeasure.

Elsewhereregionalperformancesweremoremixed–

AsiaPacificcontributedfiveofthetop20leastattractive

markets,withtwocomingfromsub-SaharanAfricaand

threefromLatinAmerica.Brazil,LatinAmerica’slargest

economy,appearstoholdacuriouspositionintheminds

ofsurveyrespondents.Rankedasthe3rdmostattractive

marketranking,andwiththe3rdhighestnumberof

plannedinvestments,Brazilmanagedtoclimb11places

tobecomeoneofthetop20leastattractivemarkets.This

perhapsreinforcesthemessagethatsignificantpotential

remains,butthatmuchchangeisneededbeforeitcan

beunlocked.Brazilwasalsooneofsixmarketstoappear

inboththemostandleastattractiveemerginglogistics

marketsrankings,alongwithBangladesh,China,Egypt,

IndiaandIran.

Havingrankedasthe13thleastattractivelogistics

marketin2015,Ukraineclimbstwomorespotsto11th

thisyear.DespiteitsproximitytotheEUanditsWestern

leaninggovernment,itappearstheeconomicturmoiland

instabilitycausedbyitsconflictwithRussian-backed

forcesintheeastofthecountryaretooworrisomefor

surveyrespondentstoseepast.Lebanonfaredbetter

intherankingduring2016.GDPgrowthof2.0%in2014

wasanimprovementoverthe0.9%seenintheprevious

year,withtheexpansionencouragedbytheCentral

Bank’sstimuluspackageandloweroilprices.Also

risingquicklythroughthisrankingisBolivia,whichsaw

itsunattractivenesshighlightedbyariseofsixranking

positionsto16th.Boliviaisbeginningtofeeltheimpact

oflowercommoditypricesandmustadapt.Itsdomestic

marketisalsounderdeveloped:despiteprogressover

muchofthelast15years,theWorldBankestimatessome

45%oftheBolivianpopulationisaffectedbypoverty.




Contents

65

25%

20%

15%

10%

5%

0%

Intra-Asia Asia-Europe Asia-NorthAmerica

Asia-SouthAmerica

Asia-Africa Asia-Middle East

South America-North America

Africa-Europe

2016 2015

% o

f res

po

nden

ts

18.6%20.4%

16.0% 16.0%

13.8% 13.1% 13.0%11.8% 12.8%

11.7%10.7%

12.2%

8.1%

6.7% 7.0%

8.1%

Prospects for Emerging Trade Lanes

Which of the following trade lanes do you believe have the greatest potential for future growth?


Theintra-Asiatradelaneremainsthemostpromising,

accordingtosurveyrespondents,althoughitsproportion

ofresponsesdropped1.8ppyear-on-year.Alreadya

significanttradelane,intra-Asiaseafreightmovements

totalapproximately25%ofallseafreightcontainer

movements,accordingtoMCCTransport,asubsidiaryof

MaerskLine.Thishasanumberofdrivers,butperhaps

mostsignificantlyforthelane’songoingfortunesisthe

growingtrendamongstmanufacturersandproducers

toadopt‘China+1’strategies.Thisislikelytoseemore

regionalisedmanufacturingpatternsandanincreasein

thevolumeofpartsandcomponentsshippedbetween

locationswithinAsia.Fallingconfidenceinthelane,

however,mayalsobeexplainedbyanumberoffactors.

Onthepositiveside,itmaybeavictimofitsownsuccess

–theintra-Asialaneisfloodedwithcapacity,especially

inseafreight,andishighlycompetitive.Underthislight,

thefallinproportionofresponsesreflectsthechallenge

ofcommerciallyviableoperationsintheregion,rather

thanafundamentallossofconfidenceunderminingthe

lane’sprospects.Anotherpossiblecauseofthefalldoes

advancealossofconfidenceinthelane,however.China’s

slowdownanditslesseningdemandforcommoditieswill

alterthedynamicsofintra-Asiatrade–logisticsservice

providersmustadaptandrespond.

AlsolosingresponsesharearethetwoSouthAmerican

lanes.Aswithallregionalchallenges,theeffectsand

outcomesarespotty,causingmoredisruptioninsome

marketsthaninothers,buttheregion,experiencing

economicwoesinmajormarketsincludingBraziland

Argentina,issufferingfromafallinglobalcommodity

pricesandreduceddemandforsomeoftheraw

materialsandproductsitexports.Withconfidencein

growingvolumesonaparticulartradelanecomesa

tacitacknowledgementthatdemandwillgrowinthe

destinationregion.Fourlanes–Asia-NorthAmerica

(no.3),Asia-Africa(no.4,risingoneposition),Asia-Middle

East(no.5,risingoneposition)andAfrica-Europe(no.7,

risingoneposition)–showayear-on-yearincreasein

responseproportions,suggestingsurveyrespondents

seeimprovingdemandfromtheselocations.




Contents

66

Which of the following vertical sectors do you believe have the greatest potential for future growth in emerging markets?

Latin America

Asia

Vertical Sectors

8.0%

4.5%

4.2%

3.6%

8.0%

16.4%

26.5%

27.6%

Retail/Consumer

Hi-Tech

Automotive

Agriculture

Pharmaceuticals/Medical Equipment

Oil & Gas

Mining (metals, minerals, etc)

Chemical

Humanitarian Aid

Other

0.7%

0.7%

9.2%

8.7%

5.9%

3.5%

12.4%

14.5%

16.1%

24.5%Agriculture


Automotive

Retail/Consumer

Oil & Gas


Hi-Tech

Chemical

Other

Humanitarian Aid

2.4%2.7%






Contents

67

Which of the following vertical sectors do you believe have the greatest potential for future growth in emerging markets?

Sub-Saharan Africa


Vertical Sectors

5.9%

5.0%

3.9%

3.1%

6.3%

7.4%

11.0%

51.8%

Oil & Gas

Retail/Consumer


Humanitarian Aid


Agriculture

Hi-Tech

Chemical

Automotive

Other

2.7%2.9%

8.7%

8.5%

8.2%

11.3%

13.8%

17.0%

28.1%


Humanitarian Aid

Agriculture

Oil & Gas

Retail/Consumer

Other


Chemical

Automotive

Hi-Tech

0.6%1.5%

2.4%






Contents

68

Asia Pacific

InAsiaPacific,threeverticals–retail/consumer,hi-tech

andautomotive–retainedthetopthreerankingpositions

astheverticalsectorsmostlikelytocreateopportunities

forlogisticsserviceproviders.Together,thethree

accountedfor70.5%ofthetotalresponses,pointing

towardstheincreasedspendingpoweroftheregion’s

middleclass,aswellastheincreasinglysophisticated

andvaluableproductsAsiaPacific’smanufacturersare

producing.

Latin America

FourverticalsectorswithinLatinAmericaachieveda

shareofatleast10.0%ofresponses,accountingfora

totalof67.5%,tosuggestthatlogisticsserviceproviders

canfindopportunitiesthroughouttheregion’seconomy.

Ofthefour,however,three–mining,automotiveand

retail/consumer–lostsharewhencomparedwithlast

year,whileAgriculture,theleadingsector,sawitsshare

increase.Overall,however,theresultsappeartoagain

showthatLatinAmericaisviewedasaproducerofraw

materials.Majormarketsintheregionofferingsuch

resourcesincludeBrazil(amajorproducerofsugar,

coffeeandorangejuice),Argentina(aleadingexporter

ofbothsoyabeanoilandcorn)andColombia(amajor

producerofflowersshippedviaairfreight).


Theoil&gassectorisclearlyfavouredbysurvey

respondentsastheindustrymostlikelytodrivegrowthin

theMENAregion.Indeed,morethanhalf(51.8%)agreed

thiswasthecase.Acrosstheregion,however,logistics

serviceprovidersmayfindthemselvesunderpressure

toincreaseefficiencyandidentifypotentialsavings,with

oilexportingmarketsfeelingthepinchoflowerprices.

Similarly,itseemslikelythatinvestmentsinothersectors

willincrease,astheneedforeconomicdiversificationto

mitigateagainstthefallinoilpricesaccelerates.Inthe

UAE,forexample,diversificationinitiativessawthenon-

oilsectorgrow8.1%in2014.Currently,onlyoneother

sectorgainsmorethana10.0%shareoftheresponses:

retail/consumerat11.0%.Humanitarianaid,MENA’s

fourthrankedverticalsector,jumpsfromarankingof6th

lastyear.Thisislikelytobeduetoongoingconflictsin

SyriaandIraq,andthesubsequentrefugeemovements

intoandthroughotherregionalmarkets.

Sub-Saharan Africa

Sub-SaharanAfrica’sminingsectorplacedatthetopof

therankingswith28.1%ofthosesurveyedsuggesting

itholdsthegreatestcapacitytodrivefuturegrowthin

theregion.Humanitarianaidrankedsecond,withthe

twoverticalsectorscombinedaccountingfornearlyhalf

(45.1%)ofthetotalresponses.Theretail/consumersector

wasranked5th,withjust8.7%oftheresponses.Although

thisdemonstratesagainof0.6ppcomparedwithlast

year’sresults,thesuggestionisthatthereremains

muchprogresstobemadeifagrowingmiddleclass

andconsumerspendingistobeakeydriverbehindthe

region’semergence,asalsostatedbyrespondents.




Contents

69

Country 2016 2015 Y-o-Y Change

China 1 1 -

India 2 2 -

Brazil 3 3 -

UAE 4 5 up 1

Vietnam 5 4 down 1

Russia 6 6 -

Indonesia 7 7 -

South Africa 8 9 up 1

Mexico 9 8 down 1

Malaysia 10 12 up 2

Saudi Arabia 11 13 up 2

Thailand 12 10 down 2

Qatar 13 15 up 2

Turkey 14 11 down 3

Philippines 15 14 down 1

Iran 16 35 up 19

Nigeria 17 17 -

Poland 18 18 -

Egypt 19 22 up 3

Kuwait 20 27 up 7

300

250

200

150

100

50

0

China

India

Brazil

Vietna

mUAE

Russia

Indon

esia

Mex

ico

Mala

ysia

Saudi A

rabia

No.

of

pla

nned

inve

stm

ents

South

Afri

ca

Thail

and

Qatar

Turk

ey

Philip

pines

Iran

Nigeria

Poland

Egypt

Kuwait

Markets for Potential Investment over the Next Five Years

Which of the following countries, if any, do you plan to expand into in the next 5 years?






Contents

70

Thetopthreemarketsforplannedinvestmentsare

unchangedinthe2016survey.Respondentsalso

matchedthetopmarketsherewiththemostattractive

markets,appearingtofollowtheiropinionswithaction.

Chinaretainsitsfirstplacedrankingforthenumberof

plannedinvestmentswith279,butIndiarunsveryclose

alongside,at275.Thisagainsuggeststhetwomarkets

presentcompellingopportunitiesforlogisticsservice

providers.Brazilretains3rdpositionwith216planned

investments,upfrom213in2015,despiteachallenging

yearthatsawthecountryenterrecession.Investments,

andinvestingplans,however,arelong-termstrategies

andmanymaywellbewillingtolookpastshort-term

turbulencetothefundamentalsofthemarketwhich

remaininplace,athemesuggestedseveraltimesbythis

year’ssurveyrespondents.Howmanyoftheseplanned

investmentsinBrazilactuallycometofruitionmaywell

rideonthetrajectoryofBrazil’srecoveryoverthenext12

months,however.

Iranagainperformswell.Afterrising11placestobecome

atop20mostattractivemarket,itjumps19placesto

16thhere,with87plannedinvestments,upfrom30last

year.AmongstthosethatviewtheIranianmarketas

oneofhighpotential,thereappearstobeawilltomove

quicklyinordertogainpresenceandshareinthemarket.

Whiletherewererelativelyminimalchangesamongstthe

top10,Vietnam’sslipto5thcameonthebackofayear

thatsawa7.4%riseinFDI.ThattheUAEwasableto

outpaceVietnamshowstheintensityofthecompetitive

environmentemergingmarketsfindthemselvesin.

IttookChina279plannedinvestmentstotopthechart

in2016,upfromthe254thatwererequiredtotaketop

spotlastyear.Combined,thetop20investmentlocations

in2016haveatotalof2,621plannedinvestments,

upfrom2,225lastyear.Thenumberofplanned

investmentsamongstthebottom20rankedmarketsalso

increased,growingfrom354to368,suggestinggrowth

ininvestmentactivitythroughoutemergingmarkets.

Measuredbyregion,AsiaPacificledthewaywith1,383

plannedinvestmentsacross14emergingmarkets,

followedbyMiddleEast&NorthAfricawith959across

17markets.TheUAEranksfirstamongstMENAcountries

with185plannedinvestments,havingadded33since

lastyear.SaudiArabiarankssecondintheregionwitha

totalof108,whileQatar,with102,isitsthirdmostpopular

investmentlocation.LatinAmericahasatotalof604

plannedinvestments,ledbyBrazilwhich,at216planned

investments,isnearlytwiceaspopularassecondranked

locationMexico,with118plannedinvestments.Asimilar

patternisvisibleamongstplannedinvestmentsinSub-

SaharanAfrica.Oftheregion’s347plannedinvestments,

133arelocatedwithinthemostpopularmarket,

SouthAfrica,while2ndrankedNigeriahas73planned

investments.Theremaining337plannedinvestmentsare

spreadacrossRussia(147)andEasternEurope,including

70inPolandand19inUkraine.




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71

Prospects for the Chinese Economy

Which position do you believe best reflects the current state of the Chinese economy?

AsgrowthinChinaslowedduring2015,questionshave

beenraisedaboutthefutureoftheChineseeconomy.

Withannualgrowthforecastatanofficialrateof7.0%

in2015andkeysectorsofitseconomyslowing,there

arefundamentalquestionsabouthowChinaisbest

understood–asaprosperousmarketundergoinga

short-termadjustment,orasaneconomywithsignificant

structuralproblems.At54.8%,morethanhalfofsurvey

respondentsunderstandChinaasthelatter,callinginto

questionthelong-termgrowthprospectsoftheworld’s

secondlargesteconomy.

ThisissignificantbecauseChinaplayssuchamajorrole

intheprospectsofsomanyotheremergingmarkets.In

therushtomeetChinesedemand,emergingmarkets

onaglobalscalebegantofeedincommoditiesandraw

materialsthatfuelledthecountry’sconstructionboom.

Stillothersfedincomponentsandfinishedproductsto

beabsorbedbytheworld’slargestmanufacturinghub.

Moreover,Chineseinvestmentshavebecomelargeenough

toequalmajorcomponentsofGDPinsomecountries

withinsub-SaharanAfrica,meaninganendtoChinese

investmentintheregionmayhaveadevastatingimpact.

Despitethis,however,anotinsignificant45.2%havefaith

inChina’sleadershiptoovercomewhattheyseeasa

temporaryslowdown.Achievingthiswillbelinkedtothe

abilityofthestatetosuccessfullytransitionitseconomy

fromexport-ledmanufacturertoamarketdrivenby

domesticdemand.Itmaywellbethatthosewhoseethis

courseunfoldingarelookingtoChina’srapidlygrowing

andincreasinglywealthymiddleclass,andarepositioning

theirbusinesstoprovidelogisticsservicesthatsupport

andsupplyretailandconsumermarketsinthecountry.

Itcouldalsobethattheselogisticsserviceprovidersare

lookingtopositiontheiroperationstotakeadvantage

ofthetrendtowardshighervaluemanufacturinginthe

country,particularlyintheautomotiveandpharmaceutical

&medicaldevicesectors.Eitherway,thosewithamore

positiveoutlookforChinaappeartobelookingforits

economictransitiontobringaboutgreaterdemandfor

highervaluelogisticsservices.

45.2%

54.8%

China is experiencing some short-term difficulties. It will overcome these and stability will return to the economy.

The Chinese economy has some significant structural problems that will present it with major challenges over the next 2-3 years.





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Yes, but the reassessment is limited to our plans for China

Yes, and it’s highlighted the need for a reassessment of our emerging markets strategy overall.

Not yet, we are waiting to see which course developments in China take before making any major adjustments

No, we’re confident we can deal with the volatility seen this year and do not see any need to reassess strategies at this time

No, we’re not concerned about developments in China’s economy

17.2%

21.8%

38.0%

15.5%

7.5%

The Effects of Chinese Economic Turbulence

Has the turbulence in the Chinese economy during 2015 caused you to reassess your emerging markets strategies?


Whenaskedtheextenttowhichtheturbulencewithin

theChineseeconomyhadaffectedemergingmarket

strategies,38.0%ofthosesurveyedindicatedthatwhile

nomajorreassessmenthassofartakenplace,itwas

likelythatthecourseofeventsintheworld’ssecond

largesteconomywouldimpactupontheirfutureactions.

Onbalance,morerespondents(39.0%)arealready

adjustingtheirplansasaresultoftheturbulencethan

thosewhodonotseeanycauseforrealignment(23.0%).

ThroughouttheIndexandthesurvey,amoreturbulent

pictureofboththepresentandfutureofemerging

markets’logisticssectorsispresented.Thishasmany

driversandtheslowdowninChina’seconomyiscertainly

oneofthese.China’sinfluenceonotheremerging

marketsishighlysignificant.Whilemanufacturersand

producersinemergingmarketstheworldoverhave

foundcustomersandclientsintheworld’sdeveloped

nations,sotoohavetheyfoundaboomingbusiness

servingChina’sdemandforparts,componentsandraw

materials.FallingdemandinChina’sconstructionand

manufacturingsectorsaresuppressinggrowthandmany

emergingmarketsareseeinglowerexportvolumesasa

result.Fallingvolumesarecreatingproblemsofindustry

overcapacity,particularlyinseafreight,andheightening

pricecompetition.

Indeed,thesituationpresentedbyChinaiscausing

morethanonefifthofallsurveyrespondents(21.8%)to

fundamentallyreassesstheirentireemergingmarkets

strategy,whileasumtotalof77.0%willchangecoursein

eitherChinaoracrosstheiremergingmarketspresence

ifChina’seconomydoesnotexperienceasteadieryear

in2016.Theresultsheresuggest2016couldseea

potentiallyfundamentalshiftinemergingmarketstrategy

iftheturbulenceinChina’seconomyturnsintoahard

landingforthosethathaveriddenthecommoditywave

overmuchofthelastdecade.Logisticsserviceproviders

willhavetoreactquicklytoadapttheiroperationsto

anewsetofrulesthatwillgovernemergingmarket

logistics.




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73

21.2%

12.7%

22.8%

23.1%

20.2%We do not operate in, or plan to operate in, Africa

We have no immediate plans to establish operations in the region

We plan to establish operations in the region, but need to assess which vertical sectors / geographies are best suited to our business

We have identified the vertical sectors/domestic markets we want to enter, and are in the planning stages

We have established operations, and we’re looking at strategic growth opportunities

Which of the following statements best reflects your strategy in sub-Saharan Africa?

Strategies for Sub-Saharan Africa


Morethanhalfofthosesurveyedareeitheroperationalor

intheplanningstagesforentryintotheAfricanlogistics

market,althoughjust21.2%ofrespondentshavefully

establishedoperations.Thiswouldseemtosuggestthat

manyhaveidentifiedAfricaanditsindividualeconomies

andindustriesasholdingpotentialasfuturelogistics

markets.Thereis,however,alsoastrongmessagethat

manyhaveahardertimeseeingtheregion’spotential

–43.3%havenoimmediateplansornointentionof

enteringAfrica.Suchasplitcanbeexplainedbymany

factors–thesizeofAfrica’spopulation(particularly

thosethatareapartofthemiddleclass)andthescale

oftheopportunitiesinindustriessuchasmining,

consumergoods&retailandagricultureareasvastas

thechallengesthatneedtobeovercomeinordertomake

themviablecommercialopportunities.Infrastructure

acrossthecontinentispoorandasignificanthindrance

tooperatinginmanyAfricanmarkets–simplylinking

manufacturinglocationstoexportgatewayscanbe

problematicandroads,wherepaved,areoftensubject

tochroniccongestion.Electricityproductionissporadic

inmanyareas,especiallythoseoutsidemajorurbanised

zones,limitingthepotentialformoreadvancedlogistics

operations,suchascoldchainfacilities.

ItmaywellbethatAfrica’slogisticsmarketmayremain

initsseeminglyperpetualstateofbeingamedium-

termopportunityuntilitcanovercomesomeofthese

morefundamentalchallenges.At22.8%,theindication

isthatnearlyonequarteroflogisticsserviceproviders

willenterthecontinent’slogisticsmarket,shouldthe

correctopportunityarise.Creatingtheconditionsto

facilitatethis–ataskthatwillincludetheimprovement

ofinfrastructure,thepromotionofincomeequality,the

growthofthemiddleclassaswellasthepromotionof

transparentbusinessenvironments–isalong-standing

problem,bothregionallyandwithinindividualmarkets.




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South

Afric

a

Nigeria

Keny

aGha

naAn

gola

Tanzan

ia

Mozambiq

ue

Ethiop

ia

DR Con

go

15.0%

26.0%

17.5%

10.1%8.7%

7.8%6.6%

5.6%

2.6%

Sub-Saharan Africa’s Most Promising Markets

Which of these African countries do you believe has the most potential as a logistics market over the next 5 years? Please rank.


Whenaskedtoidentifythemostpromisingmarkets

insub-SaharanAfrica,surveyrespondentsidentified

theregion’stwolargesteconomiesashavingthemost

potential.SouthAfricaleadsthewaywitha26.0%share

oftheresponses,withNigeriarankedsecondwitha

17.5%share.BothKenya(15.0%)andGhana(10.1%)also

gainedadouble-digitshareoftheresponses.

ThatSouthAfricaleadstherankingsislikelyto

beinfluencedbytherelativelyadvancedstageof

majorverticalsectorsinthecountry,aswellasits

moreestablishedfinancialinstitutionsandbusiness

environment.Itis,however,primarilydrivenbythe

economicopportunitySouthAfricapresents–survey

respondentsrankedeconomicgrowthasbyfarthe

mostsignificantdriverbehindtheemergenceoflogistics

markets.JoiningSouthAfricaashighlyratedmarketsare

NigeriaandKenya,thelatterofwhichissupportinghigh

economicgrowthwithlowenergycostsandinvestments

ininfrastructure,aswellasindustriesincludingagriculture

andmanufacturing.Moreover,thecountry’spopulation

of45.5misgrowingbyaroundonemillionperyear,with

continuallyimprovingeducationofferedtotheyoung.

Therearechallenges,however.InNovember2015,heavy

rainscauseddamagetoroadsbetweenMombasaand

Nairobi,causinga50kmtrafficjamthatlasted60hours,

withthehaulierscaughtuplosingmillionsofshillingsas

aresult.

Whiletheremaybesomeamountofconsensusbehind

Africa’smostpromisingmarkets–58.5%agreethat

eitherSouthAfrica,NigeriaorKenyadeservethistitle

–coupledwiththepreviousquestion,thesuggestionis

ofagapbetweenrecognisingthetraitsofapromising

marketandenteringamarket.Insuchcircumstances,it

maybethatlogisticsmarketsinAfricaareopportunities

bestaddressedwithlowriskstrategiesovertheshort-

andmedium-term,suchasjointventuresorpartnership

agreements.




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2016 2015

% o

f res

po

nden

ts 23.9%

17.8%

28.9%

14.0%12.1%

4.5%

23.8%22.6% 22.7%

13.6%11.5%

4.6%

Growing middle class and consumer

spending

Mineral and resource demand

New oil and gas discoveries

Rapid infrastructure development

Stronger agricultural demand

Increased FDI

40%

35%

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25%

20%

15%

10%

5%

0%

2016 2015

% o

f res

po

nden

ts

32.5% 33.0%31.2%

12.1%

8.4%

2.3%

31.0%

12.2%13.0%

11.8% 10.3%

2.1%

Poor quality infrastructure

Corruption Poor connectivity/ linkages between economic centres

Uneven economic development

Lack of integration between economies

Size/scale of the continent

Drivers behind the Emergence of Sub-Saharan Africa’s Emerging Markets

What do you perceive to be the most significant driver of growth in the emergence of Africa’s logistics market?

What do you perceive to be the biggest challenge prohibiting the emergence of Africa’s logistics market?

Inhibitors of Growth in Sub-Saharan Africa






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76

Asignificantswitchtookplacein2016,asthetoptwo

driversofsub-SaharanAfrica’semerginglogistics

marketsswitchedpositions.With23.9%ofthe

responses,agrowingmiddleclassandconsumer

spendingrankedastheprimarydriverbehindtheregion’s

emergence,marginallybeatingmineralandresource

demandintosecondposition.Although,whiletheranking

ordermayhavechanged,thosethatseeextractive

industriesasthedrivingforcestillaccountforthelargest

shareofresponses.Thisfigureisdownfrom51.6%last

year,however.Individually,though,allthreedriversranked

closelyandwereseparatedbyjust1.3pp.Thisappearsto

reflectsurveyrespondents’recognitionofthediversityof

Africa’sindividualmarketsandthatgrowthwillbedriven

byvariouslogisticsrequirementsacrossthedifferent

areasofthecontinent.

Itseemsfairtosaythatthisyear’sresultsreflectseveral

widertrends.Firstly,increasedfaithisbeingshownin

Africa’sabilitytogrowitsmiddleclass,inturnstimulating

demandforthehighervaluelogisticsservicesrequiredto

supportmoresophisticatedretailingandmanufacturing

practices.Secondly,itappearsthatsurveyrespondents

havealreadybeguntofactorinlowercommodityprices

intothedevelopmentoftheirAfricanstrategies.Italso

appearstoshowthat,whentheseresultsarecompared

withquestion2inthissurvey(whichfactorsdrive

emergingmarketgrowthglobally)industryexecutivesare

lookingforthedriverofthemostsignificantfactoroverall,

economicgrowth.Finally,itpaintsapictureofcomplexity

andofvariedanddiverseopportunitiesindifferent

logisticsmarketsacrossAfrica.Thisisperhapswhywe

seejust21.2%ofthosesurveyedactivelyoperatingin

Africaandwhy43.3%havenoplanstoenteranyofthe

region’smarketsoverthemedium-orlong-term.

In2016,thesignificanceofthefactorsinhibitingthe

emergenceofsub-SaharanAfrica’semerginglogistics

marketsarebroadlyunchangedfromthoseayearago.

Thiswouldappeartosuggestthat,whileprogressis

beingmadetoimprovetheattractivenessofopportunities

insomemarkets,littleisbeingdonetoreducethe

barrierstoentry.Onceagain,surveyrespondentssaw

poorinfrastructureasthemostsignificantinhibitorof

developmentintheregion,yetrankedinfrastructure

developmentasonlythefourthmostsignificantdriver.

Notonlyislogisticsfundamentallylimitedbypoor

infrastructure,widereconomicdevelopmentishindered

bypoorconnectivityandlinkagesbetweeneconomic

centresandgeneralinequality.Thatjust2.1%of

respondentsbelievedthesizeandscaleofthecontinent

tobefundamentallyholdingbackgrowthsuggestsa

lackofcoordinatedactiontoovercomeinfrastructure

challengesisbehindtheproblem.




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The BRICS as a grouping is as relevant as ever with each country representing an excellent opportunity for logistics providers

The BRICS overall are still an attractive proposition, but we are less optimistic than before

We are now uncertain whether the BRICS remain an attractive proposition

We used to consider the BRICS as a grouping, but it no longer makes sense to analyse them together due to each country’s diverging prospects

We have never treated the BRICS as a grouping of the best emerging markets to invest in

19.0%

30.1%

12.9%

29.8%

8.2%

Prospects for the BRICS

Brazil’s credit is junk, Russia is in recession, China could be headed for a ‘hard landing’ and South Africa is yet to fulfil its potential. Currently, India seems to be the only BRICS nation growing and generating optimism. Given these recent ‘struggles’, which statement best represents your view of the BRICS?


Opinionamongstsurveyrespondentsappearssplit

astowhethertheBRICSnationsremainagroupthat

representthebestopportunitiesemergingmarketshave

tooffer:30.1%suggestthatthegroupremainsvalid,so

longasexpectationsaremoderated,29.8%suggest

thatindividuallythemarketsholdpotential,butthatthe

divergentpathstakenbythemarketstothispointmean

acronym-basedstrategiesarenolongeruseful.

ThepositionoftheBRICSnationsatthecentreoftheir

respectiveregionaleconomiesandtheirsignificance

totheglobaleconomyhasgrownmarkedlysincethe

termwascoinedmorethanadecadeago.Asexamples

ofhighgrowth,highpotentialemergingmarkets,

opportunitiescouldbefoundinmanufacturingsectors

oramongsttherapidlyexpandingmiddleclassesofall

fivenations.However,withChinaslowing,Braziland

RussiainrecessionandIndiagrowingbutstrugglingto

implementdesperatelyneededreforms,50.9%ofsurvey

respondentsagreedthatitisincreasinglyhardtolook

atthisgroupingofnationswiththesamepositivityasin

yearsgoneby.Thosedisinclinedtobelievethegrouping

retainsitspotentialmainlycitedtherapidlydiverging

prospectsoftheindividualnationsasthereasonfor

theirscepticism.However,withthesplitinopinionso

even,itappearsthosewithamorepositiveoutlookofthe

groupingseeacompellingreasontoretainthisview.This

positionisperhapsbestsummedupbyonerespondent

whocommented:

“These countries are grouped together due to their size

and opportunity. They are still exceptionally relevant

and great opportunities for individuals that take time to

understand the unique challenges and opportunities for

each market.”




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Poor

gover

nanc

e

Corrup

tion

Exce

ssive

gover

nmen

t deb

t

High in

flatio

n

Trans

port a

nd lo

gistic

s

infra

struc

ture

Overde

pend

ence

on

export

s to C

hina

Low co

mmodity

price

s Other

34.7%

21.3%

17.1%

8.4%7.4%

5.0%3.9%

2.1%

Barriers to Growth in Brazil

What is Brazil’s biggest obstacle to returning to higher growth?


Morethanonethird(34.7%)ofrespondentscitedpoor

governanceasthekeybarriertoBrazilreturningtohigher

ratesofgrowth.Whilethisbarrierestablishedafairly

sizeableleadovertheotheroptions,itmakessense

togrouptogetherthetopthreerankedbarriers–poor

governance,corruptionandexcessivegovernment

debt(whichtotalled73.1%oftheresponses)–aseach

sharesacommoncausalvariable,thecountry’scentral

government.

ForecastssuggestBrazil’spublicdebtcouldreachas

muchas70%ofGDPinthecomingyears.Whilethe

country’sleadershiphasmovedtodispelsuchestimates,

Standard&Poor’s,inthreateningtoremoveBrazil’s

investment-graderating,clearlyseecausesforconcern

foritsfinancialhealth.Currentlyinrecession,Brazil’s

economy,itsprivatesectoranditsmiddleclasshavelost

muchofthedynamismthatcontributedsosignificantly

tothecountry’spotentialoverthelastfewyears.Taken

together,thetopthreerankedreasonsgosomewayto

explainingthis.MuchofBrazil’sgrowthwasdrivenby

thecommodityboomwhichsawitbecomeanexporting

powerhouse,withmillionsenteringthemiddleclass

anddeployingtheirnewfoundspendingpower.Falling

commodityandoilpriceshowever,revealedthatBrazil’s

governmentfailedtoimplementstructuralreformsthat

wouldensurethecountry’sbusinessesandlabourmarket

couldremaincompetitiveandproductive.Investment

hasslowedinthecountry.AccordingtodatafromfDi

Markets,greenfieldFDIinBrazilattracted$50bnin2011,

withmorethan500projectsfunded.Theleveloffunding

hasfallenineachyearsince,however,andin2014,322

greenfieldprojectsattractedjust$18bn,whilecapital

investmentinBrazil’smanufacturingsectorhasalso

mirroredthisdecline.Thisiscompoundedbyaneconomy

sufferingfromacorruptionscandalatstate-ownedoil

companyPetrobras,withanestimatedcostof$2bntothe

economy,whichreachesseniorlevelsofgovernment.




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Yes, its economic growth is impressive and reforms will only enhance its potential

Yes, but it needs to enact reforms to sustain growth

Maybe, reforms will help, but much more needs to be done to unlock potential

No, the reforms it needs will take longer than just 2-3 years to overcome

27.6%

41.6%

21.5%

9.3%

The Future of Growth in India

India now has a higher economic growth rate than China, a feat it is expected to repeat through 2020. Are you optimistic about India’s prospects over the next 2-3 years?


At41.6%,alargeproportionofthosesurveyedindicate

thatIndia’sgrowthcannotbesustainedbeyondthe

short-termwithoutreformsthatremovecomplexityand

inefficiencyfromtheeconomy.Combinedwiththe21.5%

thatseethereformsasjustthestartoftheprocessin

termsofunlockingIndia’spotential,thesignificanceof

thetaskfacingNarendraModibecomesclear.Overall,

some90.7%classifiedthemselvesashavingadegree

ofoptimismregardingthedevelopmentoftheIndian

economyovertheshort-term.

Whilemanyexamplesofmuch-neededreformsexist,

withtheGeneralSalesTaxprimeamongstthem,itis

essentialthatIndia’sleadershiptakesawide-ranging

viewofthereformsnecessarytounlockgrowthinthe

market.WithinIndia,actionisrequiredtotacklepoverty,

inequality,corruption,sporadicenergyprovisionanda

gapinginfrastructuredeficit.Tacklingjusttwoofthese

issues–energyprovisionandtheinfrastructuregap–

will,accordingtotheWorldBank,costasmuchas$1.7

trillionoverthenextdecade.Indeed,therearefewareas

oftheIndianeconomywhicharenotinneedofattention

–increasedprivatisation,labour-marketreformand

openingsectorsoftheeconomy,includingretail,wouldall

contributetoanincreasedgrowthrateinIndia.




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Yes, the turbulence will be short-lived

I expect less volatility, but only once issues have been resolved will stability return

It’s too early to be sure what direction the global economy will take

No, a similar level of volatility can be expected in the year ahead

No, any one of these issues has the potential to cause even more volatility in the year ahead

13.0%

26.4%

33.7%

21.8%

5.2%

Expectations for 2016

2015 has seen the US dollar gaining strength, low oil prices and a sharp slowdown in Chinese growth which sent emerging market currencies plunging while trade volumes sank, markets became more volatile and commodity prices fell. Do you expect a return to more stable times in 2016?


Followingtheturbulenceof2015thatsawcommodity

pricesfall,emergingmarketcurrencieslosevaluewhile

theUSdollargainedstrength,lowoilprices,weakglobal

tradevolumegrowthandslowingeconomicgrowthin

majoremergingmarketslikeChina,RussiaandBrazil,

itisperhapsreasonablethat33.7%ofthosesurveyed

indicatedthattheywerestillunsurewhethertheglobal

economywouldreturntoamorestabletimein2016.

Whensplittingthoserespondentswithapositiveoutlook

fromthosewhoviewprospectsfor2016negatively,

however,aslightadvantageisgiventothoseexpecting

alessturbulent,ifnotentirelystable2016,with39.4%

expectinganimprovementtothelandscapeinthe

yearahead.

Suchuncertaintyseemsareasonableresponsetothe

eventsof2015.Theforcesandtrendsthathaveshaped

thetrajectoryoflogisticsmarketsacrosstheworldhave

hadunpredictableandunevenimpacts,anditappears

likelythattherecoverypredictedbytheIMFin2016will

bejustasuneven,withdownsiderisksremainingand

growthlikelytobesporadicandshallow.Thethirdphase

oftheglobalfinancialturbulencelookssettocontinue

withlowcommodityprices,currencydepreciationsand

financialmarketvolatilitycombiningtoproducegenerally

lowergrowthamongstemergingmarkets.Logistics

executiveswillstillfindopportunitiesinthesemarkets,

however,andbrightspotswillemergefromaglobal

economyforecasttoproducemorestability.




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Oil pric

es

The d

irecti

on of

China’s

econ

omy

The s

treng

th of

the US d

ollar

The s

treng

th of

the US e

cono

my

Low co

mmodity

price

s

Furth

er fal

ls in

globa

l

export

volum

es

The s

treng

th of

the

Europ

ean e

cono

my Other

3.1%

6.2%

9.5%9.5%

11.6%11.9%

21.1%

27.1%

Most Significant Drivers in the Global Economy

Which of the following do you think will have the most significant impact on global economic and trade growth over the next 12 months?


Thepriceofoilwasratedasthefactormostlikelyto

haveasignificantimpactonglobaltradeintheyear

ahead,with27.1%ofsurveyrespondentscitingitas

such.Formany,includingcountriessuchastheUAE

andSaudiArabiawhichrankamongstthetop10most

promisingemergingmarketsinthisyear’sIndex,aswell

asfastrisingmarketslikeNigeria,loweroilpricesequate

tolowerrevenuesandreductionsinpublicspending.

Thisunderminestheabilityofsomemarketstomake

investmentstargetedatdiversifyingtheireconomiesand

growingconsumermarketsaswellasinvestmentsin

improvinginfrastructure,allofwhicharehinderingfactors

thatlogisticsexecutiveswillneedtoaccountforintheir

investmentdecisions.

Thesecondmostsignificantdriverintheglobaleconomy

willbethedirectionofChina’seconomy,according

to21.1%ofsurveyrespondents.Asanimporterof

commodities,partsandcomponents,Chinaispositioned

atacrucialpointformanycommodityexportingnations

whichhavecometodependonthedemanditgenerates.

Acrosstheworld,butparticularlyinAsia’sotheremerging

markets,manufacturersandproducershaveestablished

operationstofeedpartsandcomponentsintoChina’s

ownmanufacturingsector.AslowingChineseeconomy

hasalreadyresultedinlowerdemandandlowerprices,

meaningotheremergingmarketsarehavingtoadjustto

lowerexportrevenuesandseekamorediversifiedbase

ofeconomicgrowth.Theoutcomeislikelytodepend

ontheinteractionofpricesandvolumes,aswellasthe

amountofcontagionChina’sslowdownpushesintothe

globaleconomyviaongoingcurrencyvolatilityanda

moregeneralunderminingofconfidenceinemerging

marketinvestment.

Accordingto23.5%ofrespondents,itwillbethe

influenceoftheUSthatwill,onewayoranother,bethe

mostsignificantdriveroftheworldeconomy.Agrowing

USeconomymayhaveapositiveinfluenceontrade,

increasingdemandforimports,especiallyatatime

whentheUSdollarisgainingstrength.Thislastelement,

however,willpushthecostofdollar-denominateddebt

up,effectivelyraisingrepayments,aswillanincreasein

USinterestrates.




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82

59.4%

4.7%

35.9%Too optimistic

About right

Too pessimistic

Prospects for Emerging Market Growth

The IMF forecasts 2016 emerging market growth of 4.7%. In your opinion, is this:


Morethanhalf(59.4%)ofthosesurveyedexpressthe

beliefthatemergingmarketgrowthofaround4.7%could

beconsideredrealisticoverthecourseof2016.And,

accordingtomorethanonethird(35.9%)ofrespondents,

thisisasmuchascanrealisticallybeexpected.

Throughout2015,manythreatsandchallengesto

growthinbothdevelopedandemergingeconomies

havecauseddisruptionandturbulence.China’sslowing

economy,loweroilprices,volatilecurrenciesandthe

spectreofhigherUSinterestratesallcirculateandcause

uncertainty,mainlybecauseeachhasanimpact,directly

orindirectly,onafundamentaldriverofthelogistics

industry–globaltradevolumes.Forthesereasons,itmay

wellbethatsurveyrespondentshavemoderatedtheir

expectationsofexplosivegrowthinemergingmarkets

downwards.Theunevenimpactofthesevariables,

however,willperhapsseestronggrowthincertainsectors

orcertainmarkets.Wherethisoccurs,logisticsservice

providerswouldbewelladvisedtoexpecttofindhighly

competitiveenvironments.




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About Agility and Transport Intelligence

Agility – A leader in Emerging Markets

Agilitybringsefficiencytosupplychainsinsomeof

theglobe’smostchallengingenvironments,offering

unmatchedpersonalservice,aglobalfootprintand

customisedcapabilitiesindevelopedanddeveloping

economiesalike.Agilityisoneoftheworld’sleading

providersofintegratedlogistics.Itisapubliclytraded

companywithover$4.8bninrevenueandmorethan

20,000employeesin500officesacross100countries.

Agility’scorecommercialbusiness,GlobalIntegrated

Logistics(GIL),providessupplychainsolutionstomeet

traditionalandcomplexcustomerneeds.GILoffers

air,oceanandroadfreightforwarding,warehousing,

distribution,andspecializedservicesinprojectlogistics,

fairsandevents,andchemicals.Agility’sInfrastructure

groupofcompaniesmanagesindustrialrealestateand

offerslogistics-relatedservices,includinge-government

customsoptimizationandconsulting,wastemanagement

andrecycling,aviationandground-handlingservices,

supporttogovernmentsandministriesofdefense,remote

infrastructureandlifesupport.

Web: www.agility.com

Twitter: @Agility

LinkedIn: www.linkedin.com/company/agility

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http://www.agility.com

http://twitter.com/agility

http://www.linkedin.com/company/agility



Contents

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Transport Intelligence

Tiisoneoftheworld’sleadingprovidersofexpert

researchandanalysisdedicatedtothegloballogistics

industry.Utilisingtheexpertiseofprofessionalswith

manyyears’experienceinthemail,expressandlogistics

industry,TransportIntelligencehasdevelopedarange

ofmarketleadingweb-basedproducts,reports,profiles

andservicesusedbyalltheworld’sleadinglogistics

suppliers,consultanciesandbanks,aswellasmany

usersoflogisticsservices.

IfyouhaveanyfeedbackonthisIndexpleasedonot

hesitatetogetintouchwithusbyanyofthefollowing

means:

Telephone:+44 (0)1666 519900

Email: [email protected]

Web: www.transportintelligence.com

Twitter: @transportintell

Linkedin: The Transport Intelligence Forum


mailto:ssmith%40transportintelligence.com%20?subject=Enquiry


https://twitter.com/TransportIntell

http://www.linkedin.com/company/transport-intelligence

Agility Emerging Markets- Logistics- Index 2016

Investor Relations

Transcript of Agility Emerging Markets- Logistics- Index 2016