Transport industry faces slow growth amid global stressors, reduced orders
DESPITE the imminent end of the Covid-19 threat, Cambodia’s transport sector continues to grow slowly this year. The sluggish expansion stems from ongoing geopolitical tensions among superpowers, which exert pressure on global economic growth and significantly impact product ordering and the logistics sector in Cambodia, as noted by key industrial players.
The General Department of Customs and Excise (GDCE) reported that between January and October 2023, the country’s exports to international markets amounted to $18.59 billion, a slight increase of 0.2% from $18.55 billion during the same period in 2022.
The country’s imports from international markets reached $20.07 billion during the period, a decrease of 6% from $21.36 billion year-on-year.
Chea Chandara, president of the Logistics and Supply Chain Business Association, stated on December 5 that orders for Cambodianmade goods, particularly from major markets like the US and EU, have been declining for over a year.
He said the reduction has led to a slight decrease in transport activity in 2023 compared to 2022. He noted that overseas shipments are typically busy between March and November; outside this period, transportation is less frequent due to people vacationing.
“The freight sector in Cambodia heavily relies on overseas orders. Therefore, a decrease in orders in 2023 will inevitably lead to a decline in shipments,” he stated.
Looking ahead to 2024, Chandara predicts an improvement in transportation activities, as global economic growth is expected to surpass that of 2023, according to international institutions, such as the World Bank and the International Monetary Fund (IMF).
Sin Chanthy, president of the Cambodia Logistics Association (CLA), noted that transport activity and freight prices in 2023 are similar to or slightly lower than in 2022. This is despite the reopening of countries and economies worldwide post-pandemic.
He attributed the lacklustre performance of the sector to poor global economic growth, which has dampened demand for various goods globally.
“For the majority of 2023, I’ve observed that shipping activities and prices haven’t changed much compared to last year,” he said.
However, Chanthy remains optimistic that overseas orders will increase towards the end of 2023, which should invigorate the transport sector.
The CLA hosted the 33rd ASEAN Freight Forwarder Association’s (AFFA) Annual Conference and General Meeting (AGM) from December 1-2. The event was attended by leaders from various Cambodian ministries and institutions, the Cambodian Chamber of Commerce (CCC), over 100 associations and transport companies from Cambodia and nearly 100 logistics businesses from ASEAN countries, as well as some partner companies from China, Korea and Japan.
Chanthy mentioned that during conference, all attendees committed to enhancing cooperation in information sharing and pricing, aiming to boost regional transport activities and increase activity to destinations worldwide.