FlyingTypers Logo
   Vol. 17 No. 8
Friday February 9, 2018

Toshiaki Toyama, President and CEO, ANA Cargo, and Jan Krems, President, United Cargo, kick off a deepening alliance as the carriers add westbound service this week.

      “The U.S.-to-Asia market is highly competitive, so we are excited to offer convenient access to expanded metal-neutral capacity to customers shipping westbound across the Pacific,” declared United Airlines Cargo President Jan Krems. On February 6 United Airlines and All Nippon Airways expanded the carriers’ cargo joint venture, adding westbound transpacific routes to the successful eastbound transpacific phase launched last summer in July 2016.
      Now shipments originating in the U.S. or Canada and bound for Japan get the same plus lift benefits enjoyed by shipments originating in Japan and bound for the U.S. or Canada, including access to more destinations with quicker transport times and enhanced technology to create one-stop shopping for customers.
       “One of the most gratifying aspects of our cargo joint venture with ANA is the synergy generated by bringing our two teams together,” Jan added, saying, “The collaboration between two industry leaders focused on delivering customer service excellence has created a JV service offering of which we are both proud.”
      The UA-ANA cargo joint venture network boasts 360 nonstop flights a week to 15 destinations and numerous flight and truck connections within the U.S. and Canada.

      Ahead of the Chinese New Year (CNY) factory shutdowns, market signals are rather mixed—and not just for air cargo.
      Container shipping demand, for example, has remained firm, and space is tight on the key trades from China into Europe and the U.S. But the expected surge in spot freight rates ahead of the official start to the holidays on February 16 has not materialized and lines have struggled to make General Rate Increases (GRI) stick.
      As FlyingTypers went to press, the emphasis for many shippers with urgent freight needs pre-CNY was switching to air. But thus far there hasn’t been a definite spike in rates and forwarders in Asia report ample capacity.

Where Art Thou Rates?

      Digital forwarder Flexport said air freight rates on key lanes were currently stable, with no significant gains apparent from China gateways, but added that the situation could change this week.
      “We’re beginning to see increases in demand for cargo ex-China, with capacity equally constrained to both the EU and the U.S.,” said Flexport. “We also expect space constraints out of Hong Kong and Vietnam.”
      Freightos’ latest report concluded that the Chinese New Year shutdown would interrupt international freight movements out of China “for a good 3-4 days each side of February 16, which means that for shippers, it’s getting close to the last chance to get shipments out in time.”
      The freight marketplace’s report warned that as part of this build-up, air and ocean freight movements out of China were facing squeezes in demand and tight capacities, which would raise prices at least until backlogs are cleared post-holiday.
      “Air freight prices from China have been recovering recently from an early January dip,” said the report. “Two weeks ago, China-U.S. prices were around normal non-peak rates ($2.50-3.00/kg), before rising to $2.65-3.00/kg last week, and then to $3.20-5.00/kg this week. China-Europe is in a similar range, up from $2.20-3.50/kg two weeks ago.”

Rates Switchback

Paul Tsui      But analysts are not united when it comes to reading the current market. The TAC Index covering average prices per kilo from Shanghai PVG to Europe fell 9 percent to CNY17.40 (USD2.76) on February 5 compared to a week earlier, for example, while average prices from Hong Kong to Europe and the U.S. on February 5 were 3.5 percent and 3.83 percent lower, respectively, than a week before.
      The TAC Index readings were largely in line with the views of forwarders in Asia who in the last two weeks have been pessimistic about the pre-CNY market. Paul Tsui, managing director of Hong Kong-based forwarding and logistics operator Janel Group, said air cargo rates had barely moved since mid-January and space was available on all key routes. ”We don’t see any upward trend at all and most factories are closing this week and will only resume on February 26. It will be a quiet month—demand is not very high as some people expected.”

Looking Beyond CNY

      It will become clearer next week precisely why pre-CNY freight markets have so far been relatively flaccid, at least compared to expectations, but the outlook for the rest of the year is rosy. Certainly, unless this week’s stock market declines are harbingers of an economic downturn, there is also little on the global economic horizon to suggest anything but a prosperous year for air cargo supply chain stakeholders. Both IATA and Boeing recently predicted growth in cargo demand in 2018 of around 4.5 percent which, considering the heady numbers recorded in 2017, would represent a healthy year-on-year expansion.
Alexandre de Juniac      “The outlook for air freight in 2018 is optimistic,” said Alexandre de Juniac, IATA's Director General and CEO. “Consumer confidence is buoyant. And we see growing strength in international e-commerce and the transport of time- and temperature-sensitive goods such as pharmaceuticals.
      “Overall, the pace of growth is expected to slow from the exceptional 9.0 percent of this year. But we still expect a very healthy 4.5 percent expansion of demand in 2018. Challenges remain, including the need for industry-wide evolution to more efficient processes. That will help improve customer satisfaction and capture market share as the expectations of shippers and consumers grow ever more demanding.”

Reviewing 2017 By The Numbers

      As de Juniac noted, aided by 5.7 percent year-on-year demand growth in December, IATA’s full-year 2017 data for global air freight markets showed that demand, measured in freight ton kilometers, grew by 9.0 percent—more than double the 3.6 percent annual growth recorded in 2016 and twice the 4.3 percent expansion in world trade. 
      Freight capacity, measured in available freight ton kilometers, rose by 3.0 percent in 2017, which IATA said was the slowest annual capacity growth seen since 2012, meaning that demand growth outpaced capacity growth by a factor of three.
      “Air cargo had its strongest performance since the rebound from the global financial crisis in 2010,” said de Juniac. “Demand grew by 9.0 percent. That outpaced the industry-wide growth in both cargo capacity and in passenger demand. We saw improvements in load factors, yields and revenues. Air cargo is still a very tough and competitive business, but the developments in 2017 were the most positive that we have seen in a very long time.”

World Winners Galore

      WorldACD, meanwhile, hailed 2017 as “a record breaker.” Of course, in a ‘Trumpian’ zero-sum world, not everyone can be a ‘winner.’ But in 2017 it was difficult to identify the losers. General cargo volumes grew by 10.5 percent compared to 2016, according to WorldACD, while specific cargo products grew by 7.4 percent, resulting in overall volume growth of 9.6 percent. “The categories with the highest volume growth were Vulnerables & High Tech, Pharmaceuticals, and Flowers, showing a USD-yield growth of 8 percent, 5.4 percent, and 1 percent, respectively,” said the analyst.
      The world’s top forwarders were, by WorldACD’s definition, most definitely among 2017’s winners. The analyst said: “The Top-20 forwarders in the world remained an exclusive club, not allowing new members to join them—their growth was in line with the overall market growth, although the Top-5 (DHL Global Forwarding, Kuehe + Nagel, DB Schenker, Expeditors, and Panalpina) as a group outgrew their colleagues in volume (+16 percent vs. +14 percent). GSA's fared best in Asia Pacific (+15 percent volume growth), Europe (+12 percent), and MESA (+11 percent).”
      WorldACD also found that of the 50 largest origin cities, four recorded freight growth of well over 20 percent: Hanoi led with 25.5 percent followed by Brussels, Colombo, and Ho Chi Minh City. “Hong Kong remained our number 1 origin, growing 16 percent,” said the analyst. “Of the top-10 origins, Amsterdam and Los Angeles were the ones showing slightly less growth than the worldwide average. Among the largest destinations, Doha, leading with 42 percent, Shanghai, Osaka, Hanoi, Mexico City, Chennai, and Campinas all grew their incoming volumes by more than 20 percent.

So What About 2018?

      With positive trends continuing through the past year, the big question is of course how long all of this will continue.
      As Mark Twain said, “it is difficult to make predictions, particularly about the future.”

     Airports Council International delivered numbers through November 2017 reporting an increase in global cargo of 8.2% for the first eleven months of last year—near record levels.
     Gains in export orders, saw global figures reaching +7.8%.
     ACI reports Africa, North America and Europe once again topped growth figures for total freight, reaching +14.7%, +8.9% and +8.7% respectively. Asia-Pacific (+7.2%), Latin America-Caribbean (+6.9%) and the Middle East (+2.9%) followed, the latter starting to regain speed after slowing down to +1.3% in October.
     On a year-to-date basis, all regions posted high growth, at more than 5%.
International freight was the main driver for most of the increases, reaching +7.8% after slowing down to +4.4% over the three months prior to November.
     Airports in the Asia-Pacific region lead in volumes handled for export and overall growth.
     “Double-digit growth in total air cargo volumes will be achieved for airports as a whole in the region for 2017,” ACI predicts. “At the local level, large markets have been contributing to this success, with India (+17.9%), China (+16.7%), Japan (+12.8%) and Thailand (+11.5%) reaching double-digit growth on a year-to-date basis, and Hong Kong (+9.5%) following close behind for international trade volumes.
     The United States, the largest domestic freight market in the world, saw significant strides in volumes, increasing by +5.1% on a year-over-year basis.
     In Europe, growth was boosted by strong numbers in Spain (+15.6%), the United Kingdom (+13.2%) and Turkey (+11.3%).
     All three of these countries had year-to-date numbers reaching double-digit growth.

Exquisite Any Way You Look At It

     Pininfarina, the Italian design studio, and Aecom, a global architecture and engineering firm are delivering an out- of-this-world new control tower for the new Istanbul International Airport abuilding.
     The distinctive curving tower is intended to reference the tulip—a symbol of Istanbul.
     ACI reports, IST recorded an 11.2% uptick in air cargo volumes in 2017.

Women Powering AA Cargo
To Read More, Click Here

To Read More, Click Here.

      Everybody knows, in February Valentine's Day and affairs of the heart take center stage.
      In addition to shipments of flowers, jewelry, and candy, the Air Cargo Association of Atlanta (AACA) sends the message of love and concern for others with their Annual Blood Drive.
      “The AACA Blood drive is being held during the ‘month of love’,” reports Elliott Paige, the Airport Manager for Air Service Development Hartsfield-Jackson Atlanta International Airport who also serves on the AACA Board.
      “People might be intimidated at the thought of donating blood, but the process is quick and easy and for others in need of a world of good.”
      The venue for the blood drive is right under HJIA’s nose. The big Blood South Bus will be parked in the Philadelphia Truck Lines Parking Lot at 73 Southwoods, Parkway Ste 150, Atlanta, GA 30354.
      “AACA Blood Drive is being held February 20, 2018, between 9:30 am and 3:00 pm,” said AACA Chairwoman Adriana Trueba, also of Atlanta Customs Brokers.
      “We are urging all to come show your neighbor love and give blood.
      “All donations will stay in our area.
      “One donation can save 3 lives!
      “Please help us meet our goal of 25 bags of blood!” Adriana said.

Prizes & A Bite Back

“All participants will be entered in a chance to win 1 of 3 $25 gift cards.
      “In addition, AACA will be offering Chick-fil-A sandwiches to bring those iron levels back up!”
      If you know you are unable to donate blood but would still like to participate, AACA will be accepting can foods donations for the “Can Hunger” campaign.
      Proper ID is required to give blood.
      Register Here:


Subscription Ad

      PayPal founder and master of making science sexy, Elon Musk shipped a Tesla out into space Tuesday atop a Falcon Heavy Rocket from the legendary Pad 39 at Cape Canaveral, Florida.
      What was essentially a cargo shipment took center stage as the payload launched from the same location that birthed the first Moon missions and Space Shuttle flights.
      The view of a bright red Tesla orbiting the earth—the words “Don’t Panic” emblazoned on the dashboard—with a space-suited mannequin behind the wheel looked like the ultimate joyride.
      What better way to make the case for future space travel than by demonstrating that the future is now?
      We also loved that two of the three rocket boosters landed back to earth in a choreographed manner, evocative of a coordinated dance line.
      David Bowie’s “Life On Mars” playing on the car radio in space gave it a special touch.
      What a great day for aviation!

If You Missed Any Of The Previous 3 Issues Of FlyingTypers
Access complete issue by clicking on issue icon or
Access specific articles by clicking on article title
011718Vol. 17 No. 5
Climate Is Front Page News
Chuckles for January 29, 2018
Nordic Countries Go Greener
Qatar Cargo QEP Cool
011718Vol. 17 No. 6
We Like Mike CNS President
Chuckles for January 31, 2018
2025 On Fruit Logistica Berlin
Screen Tightens The Screws
Blue Moon Over Darmstadt

011718Vol. 17 No. 7
Women In Charge Powering AA Cargo
Chuckles for February 5, 2018
Washing My Baby Home

Publisher-Geoffrey Arend • Managing Editor-Flossie Arend
Film Editor-Ralph Arend • Special Assignments-Sabiha Arend, Emily Arend • Advertising Sales-Judy Miller

fblogoSend comments and news to geoffrey@aircargonews.com
Opinions and comments expressed herein do not necessarily reflect the views of the publisher but remain solely those of the author(s).
Air Cargo News FlyingTypers reserves the right to edit all submissions for length and content. All photos and written material submitted to this publication become the property of All Cargo Media.
All Cargo Media, Publishers of Air Cargo News Digital and FlyingTypers. Copyright ©2018 ACM, Inc. All Rights Reserved.
More@ www.aircargonews.com

recycle100% Green