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   Vol. 14  No. 11
Tuesday February 3, 2015

Cargo Speeds To Lunar Break

Caro Speeds To Lunar Break

Most signposts for air freight are looking rather perky ahead of an expected spike in demand out of China before factories close for Lunar New Year celebrations.

     Stifel’s January Airfreight Logistics Confidence sub-index—which uses a European-based survey to generate its results and so does not take into account congestion and labor challenges on the U.S. West Coast—continued on the relatively steady upward curve that started in March 2014, as it increased 0.8 points compared to December to reach 56.6.
Stewart Sinclair     All lanes experienced gains in January except U.S. to Europe, which declined 0.4 points to 53.6. Europe to the U.S. was the biggest improver. Aided by the strong greenback this lane rose 2.6 points to 54.7. Europe to Asia increased 0.2 points to 47.2 and Asia to Europe gained 0.9 points to reach an impressive 61.9.
     In Asia the export demand outlook is particularly robust. Speaking to FlyingTypers from Thailand, Stewart Sinclair, managing director of Suvarnabhumi Airport ground handler Bangkok Flight Services, said volumes had been strong throughout 2014 and this had been maintained in early 2015.           “We see no reason for this not to continue into the New Year,” he said. “There have been some additional charters related to the West Coast congestion but in general we have seen continued strong volumes throughout the year.”
     The Association of Asia Pacific Airlines said members had seen an “encouraging revival in demand after three consecutive years of declines” during 2014 as international shipments from manufacturing hubs prompted a 5.4 percent year-on-year gain in freight ton kilometer terms. Andrew Herdman, AAPA director general, said the outlook for the coming year was “broadly positive.”
Andrew Herdman     Asian carriers will be major beneficiaries of the anticipated peak out of China and other hubs in Asia in the coming weeks, as shippers rush to ship product ahead of the Chinese New Year celebrations.
     These officially run February 18-24, but factories will be closed before and after this period as coastal workers commence long journeys back to villages in the interior. A large proportion also fails to return, and short-term labor shortages are not unusual after the holidays.
     “We expect to see a surge in volumes ex China over the next two weeks in the run up to Chinese New Year—this would be in line with previous years,” one Asia-based carrier executive told FlyingTypers.
     “The West Coast is also still playing its part. Demand to the U.S. is notably stronger than demand to Europe and we expect this to continue throughout the quarter.
     “Even if all the West Coast issues were solved overnight there would still be a considerable backlog.”
Cathy Roberson, a U.S.-based senior analyst at Transport Intelligence, takes a similar line.                          “Traditionally the lead up to the Chinese New Year means demand rises for air freight and this year will be no exception,” she said. “With no end in sight to the troubles at the West Coast ports, air freight will continue where it left off in 2014 and regain a bit of share it lost to ocean freight, particularly on the Transpacific lane.”

Cathy Roberson
     Stifel’s January Airfreight Logistics Confidence ‘expected situation’ index is also upbeat when looking beyond the first quarter. A reading of 58.7 for July was taken compared to the still upbeat 54.5 recorded in January, with confidence high across the lanes.
     However, Drewry is taking a surprisingly bearish view on rates. The analyst said air freight rates had retreated from their November high as peak season demand receded.
     “Drewry’s East-West Air Freight Price Index fell 12.6 points in December to 108.2 points, bringing the index down closer to seasonal norms,” the analyst said in its latest Drewry Sea & Air Shipper Insight. “This brought to an end six consecutive months of rising pricing in which the index had gained 21.5 points, to November’s all-time high of 120.8 points.
     “Drewry expects air freight pricing to fall further in the near term as peak season recedes and lower jet fuel costs feed into fuel surcharges.”
Sky King

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Vol 14. No. 8
Where We Are Right Now
Notes From Phnom Penh
Chuckles For January 27, 2015
Logistics Needs Help
Memories Of Joe Franklin
Vol 14. No. 9
The Blizzard That Wasn't
Ayesha Hassan Doing The Heavylifting
Chuckles For January 29, 2015
CAL & ATC Team Up
Flanagan's Capital Talk
Cargo Awards Leave Some At Loss