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   Vol. 13 No. 93  
Thursday November 13, 2014

Air Options As ILWU Go Slow

Air Options As ILWU Go Slow
     Shippers and forwarders are now turning to air freight options to avoid lengthy delays at U.S. west coast ports. Indeed, some logistics executives believe the ocean capacity crunch could see the Transpacific air freight peak season continue through the first quarter of next year.
     ‘Go-slows’ by members of the International Longshore and Warehouse Union (ILWU) allied to high demand and a lack of trucking capacity have seen delays at west coast ports increase in recent weeks, prompting logistics planners to find alternative options. While some have been shipping into U.S. east coast ports, many others are now looking at air freight solutions, according to Li Wenjun, head of Air Freight, DHL Global Forwarding Asia Pacific.
     “With the current situation, in Asia Pacific, we have experienced an increased volume shift from sea freight to air freight due to U.S. port delays,” he said. “In addition, this is also typically the high season for technology goods.
     “Given the increased demand for air freight and the stable airfreight situation in terms of capacity supply, we see this peak period lasting until the end of March if nothing is done to resolve the situation.”
     An Asia-based executive for a European airline active in U.S. markets who wished to remain anonymous said demand on transpacific lanes was already high, even before port delays became a factor in shippers’ modal strategies.
     “We are seeing a reasonable peak and increased demand in the run up to Thanksgiving,” he said. “It is difficult to say if it is related to the port disruption as we have seen demand into the U.S. relatively strong for some time.”

Rubber Duck
Happier Times: A giant, yellow vinyl duck created by artist Florentijn Hofman joined a Tall Ships Festival in the Port of Los Angeles this past August. Right now, slowdown by port workers has left many scrambling as the Christmas rush continues.

     Cathy Roberson, senior analyst at Transport Intelligence, told FlyingTypers that many retailers were now becoming concerned with stock levels. “As the holiday season approaches, air freight is becoming more of an option for shippers,” she said.
     “The National Retail Federation is forecasting a 4.1 percent rise in holiday spend and an 8-11 percent rise in online sales, so for this to be a successful season for shippers they will need to be ready to quickly replenish inventory.”
     She said air freight demand would also be boosted by new retail trends. “It’s expected that airfreight will see a peak season this year as a result of not only the congestion problems at the ports, but also because of the growing influence of online and omnichannel retail sales,” she said.
     “UPS and FedEx have been working with retailers to avoid issues from last holiday season. Among the issues that UPS faced last year was that the company found it difficult to obtain necessary air cargo space to help with last minute shipments prior to Christmas Day. I imagine this year UPS will have adequate air cargo space on hand.”
SkyKing

 

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