Market Trends of asia pacific road freight transport Industry
Asia Pacific freight demands driven by global seaborne trade, which is triggering transport sector investments
- The region's new Regional Action Program (RAP) addresses issues like increasing freight and passenger volumes and reflecting the rising freight transport and mobility demand. Two-thirds of global seaborne trade is concentrated in Asia Pacific, also home to nine of the world's busiest container ports. The region is responsible for more than 40% of the global surface freight transport flows, and by 2050, the region's demand for freight transport is projected to triple.
- India's transportation sector, primarily road-dominated, contributes about 3.75% to the GDP. Over 50% of freight and 90% of passenger traffic rely on roads, driven by government and private investments, rising exports, the FMCG sector, and growing disposable income. India promotes connectivity with 100% FDI in the roads and highway sector. Japan's FY 2021 saw increased domestic freight transportation by commercial motor vehicles, totaling about 2.6 billion metric tons, with road transport leading in volume.
- International freight transport continued to operate with the support of policy measures. In the Asia Pacific region, networks like the Asian Highway, Trans-Asian Railway, and dry ports, established under ESCAP, play a vital role in land transport connectivity and logistics. These networks are increasingly integrated with inter-regional transport corridors and shipping networks. China emphasized ensuring smooth transportation and logistics to stabilize the economy, with the Industrial and Commercial Bank of China's Shandong branch extending over USD 1.19 billion in loans to support the logistics sector in 2022.
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Owing to global uncertainties, crude oil prices are soaring in the Asian economies as most of them are net oil importers
- Crude oil reached USD 130 per barrel in March 2022, its highest level since 2008, before retreating to USD 100 per barrel in April of the same year. Russia is the third-largest producer of liquid fuels and petroleum, so when the country invaded Ukraine in late February 2022, it immediately impacted crude oil prices. As the conflict continued, the prices of crude oil settled on an upward trajectory. The increase in oil price also reflects supply limitations by OPEC. Though the overall economic impact has been modest in Asia-Pacific, the situation can change quickly, subject to the magnitude and duration of oil price increases.
- Due to global geopolitical uncertainties and tight supply conditions, oil prices surpassed USD 80 in November 2021, double the price in 2020. Countries in Asia rely on coal to generate power, but shortages have turned them into natural gas. Due to high demand, natural gas prices soared in 2021 and remained high in 2022, and affected countries have switched from gas to oil to reduce power generation costs. Higher oil prices are often economically damaging for net oil importers. Most countries are net oil importers except for a few oil exporters, such as Brunei, Malaysia, and Vietnam.
- For the short term, the region prioritizes rising oil prices and global interest rates and maintains a stable macroeconomic environment of low inflation and prudent fiscal balances. The average price of gasoline worldwide remains at INR 106.90 per liter (USD 1.29). The price of petrol stands at INR 104.18 per liter (USD 1.25) in India, INR 99 per liter (USD 1.19) in China, INR 249 per liter (USD 1.9) in Pakistan, and INR 240 (USD 2.9) in Hongkong. The differences in prices across countries are due to the various taxes and subsidies for gasoline.
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OTHER KEY INDUSTRY TRENDS COVERED IN THE REPORT
- India and China among the leading nations to boost agriculture, fishing, and forestry as economic drivers in APAC
- China is the leading e-commerce market, accounting for over 50% of all retail e-commerce sales worldwide
- Australia's LPI Rank drops to 19 in 2023, with a focus on trade diversification and digital transformation for economic growth
- India's rank rose six places to 38 in LPI 2023, fueled by strategic policies and infrastructure advancements
- Japan falls to the 13th rank in LPI owing to a decline in the logistics sector in 2022 amid labor shortages and rising costs
- Thailand ranks 34th in 2023 Logistics Performance Index due to rise in export industry and enhanced logistics infrastructure
- China and India fuel road and highway construction investment, while Japan grants loan to India to strengthen India's North East road network
- Asia Pacific economies are registering huge growth in LNG imports, driven by scarce domestic production
- Electric trucks are driving the road transport market in the APAC region as many countries are adopting net zero emission standards
- India emerging as a driving force in the APAC Region's road freight transport market, with an investment of more than USD 33 billion by 2050
- Supportive trade policies and initiatives, coupled with investments, are driving growth in the region
- Oil and gas and wholesale and retail trade sectors are the fastest-growing sectors contributing to economic growth in APAC countries
- The GVA of the manufacturing industry in the region grew by over 5% YoY in 2022
- China climbs to the 19th rank in 2023 LPI, boosted by major investments and a thriving e-commerce sector
- Rising focus on infrastructure with USD 430 bn investment and National Logistics Ecosystem implementation
- Malaysia ranked 26th in the Logistic Performance Index in 2023, due to enhanced infrastructure and freight volumes
- Vietnam's Logistic Performance Index surges to 3.3 points in 2023, driven by logistics sector and export growth
- Asia Pacific economies are striving toward robust export growth by 2030, driven by government initiatives to boost trade
- Rising fuel prices, along with global semiconductors shortages, increase overall operational costs
- Prominent players in the region are primarily focusing on new product launches to expand their market share
- Road freight rates were significantly impacted in the region due to high fuel prices as a result of the Russia-Ukraine war
- India, Australia, and Japan witnessed record high and fastest annual producer and consumer price increases in 2022, largely owing to high energy and utilities cost
