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   Vol. 17 No. 79
Wednesday November 21, 2018

Turhan Ozen At Logitrans Istanbul

   Recently, Turkish Cargo commenced flights to Bangalore, that has a high annual export potential of 170 thousand tons annually.
   "With our understanding of world markets and Istanbul's great centralized position as a gateway to both Europe and Asia, we have great hope to connect Bangalore's central position in the production of the aerospace industry, IT industry, computer and hi-tech products to the world," Turhan Ozen, Turkish Chief Cargo Officer told FlyingTypers.
   "Bangalore also exports pharmaceuticals, perishable goods (fruits and vegetables), electronic, engineering, valuable items and textile products."
   "All of this activity is well connected to our growing air cargo enterprise driven by our all-new cargo center scheduled to open at the new Istanbul International Airport next year," Mr. Ozen declared.

Amazon Center Swansea Wales
Workers move forklifts in front of huge racks containing thousands of items at Amazon's fulfillment center in Swansea, Wales, in the run up to Black Friday.

Not likely! The peak season is well and truly underway with November rates and volumes benefitting from the slew of shopping festivals—Singles Day, Thanksgiving and Black Friday—rapidly gaining in popularity and driving the acceleration of e-commerce shipments even as retailers refresh inventories ahead of the traditional holiday season.

Paralysis By Analysis

     U.S. markets are also caught in a sort of frenzied paralysis due to expected increases of tariffs from 10% to 25% on many imports from China on January 1, and the threat of even more tariffs on Chinese products in the future. This has left shippers balancing the pros and cons of when to ship Chinese goods based on their view of whether the U.S.-China trade war will escalate, remain the same or an agreement might be reached. This is called risk management by some; gambling by most.

The TAC Index

     Illustrating the contorted dynamism of air cargo markets at present, TAC Index’s Hong Kong-North America ANP (Actual Net Price - defined as the All in cost to carrier/Actual weight on master AWB) reading on 12 November was $5.32 per kg, up from $4.45 per kg on October 15 and not far off the $5.56 per kg recorded on November 5, 2017, the highest price recorded by TAC Index over the last three years.
     TAC Index’s China-Hong Kong to Europe basket has also been gaining ground, reaching $3.18 per kg on November 12 from a lowly 2.76 per kg on September 24.

Price Increases

     Digital rates specialist Freightos noted in mid-November that all three major air freight trade lanes had seen price increases compared to the week starting November 5: Europe-U.S. by 2%, and China-U.S. and China-Europe, both by 6%. “Air freight prices are rising, following six months of near-static prices prior to September,” it added.
     On-the-ground reports from Flexport reflected these trends. Ex-China rates to the U.S. were reported as “high” with space tight and higher rates “expected to continue through the next few weeks of peak season.” Ex-Hong Kong space was also tight on “high” market demand.

Ex-Viet Noted

     However, ex-Vietnam capacity was stable with spot rates declining and no backlogs apparent.           One analyst hinted to FlyingTypers this could be because U.S. importers are buying ‘Made in China’ products now ahead of tariff hikes, before potentially shifting purchases to alternative production centers such as Vietnam, further down the line. Time will tell.

U.S. China Imports Up Ahead of January

Zvi Schreiber     “Freightos data shows recent increases in U.S. imports from China,” said Zvi Schreiber, CEO, Freightos. “Paradoxically, they indicate that the trade tariffs are driving increased Chinese imports in the short term.
     “Even before September's big announcement, the speed with which the first two rounds of tariffs were implemented prompted many importers to immediately start stocking up.
     “The January 1 tariff increase is still spurring demand, but so too is the specter of tariffs soon being applied to all remaining products.”

64 Dollar Question is 2019

     What happens to demand out of Asia in 2019 remains the critical question for air freight stakeholders, particularly those active on the major East-West lanes. A number of carriers have recently admitted that air cargo demand visibility on the Transpacific post-peak and/or post-Chinese New Year is hard to forecast, given the multiple variables related to tariffs now in play.           And, of course, this has repercussions for many other Asian origins, either because they play a role in supplying parts to China or because they offer non-tariff options for finished product sourcing, and might benefit from higher tariffs on Chinese products.

Nicola HughesBoeing Keeps Going

     More long-term, the outlook is equally cloudy. “Aircraft manufacturer Boeing has stated that over 2,600 new or converted freighters will be needed over the 20 years to keep up with growing air cargo demand,” said Nicola Hughes, an analyst with Freight Investor Services, an independent inter-dealer broker.
     “Boeing sees the growth in the China Express market and the ever-expanding e-commerce market as leading this need for extra capacity.

Singles Could Be A Home Run

     “Predictions from e-commerce specialist Parcelhero support this, suggesting Singles Day will double in the UK this year. As always, the relationship between demand and capacity was a hot topic at TIACA: although Boeing projects huge growth long term, in the immediate future this isn’t what we’re hearing.”

High & Tight

     And, as reported in FlyingTypers, U.S. trade policy has thrown an additional curve ball to shippers in the last month. “An added worry for online traders comes with Trump pushing to leave the postal union in a bid to increase postal rates from China to the West,” said Hughes.
     “If rates are raised next year there could be a strong push to send packages before any changes—whether capacity is available at the time again comes into question.”

Fats Domino Blue Monday

American Tantrum

  Give the gift of laughter this holiday season with American Tantrum, written by my son-in-law Anthony Atamanuik. Anthony has spent the last 3 years channeling The Donald in a worldwide comedy tour, for The President Show on Comedy Central, and now in his first published book. American Tantrum is a hilarious, cutting satire that imagines the contents of the 45th President's Presidential Archives in interviews, classified documents, illustrations and more.
  American Tantrum is written in the voice of Donald Trump, so lovers of Anthony's live impression might want to pick up a copy of the digital audiobook to fully entrench themselves in the madness. It's difficult to imagine you aren't listening to the actual President when listening to Anthony. You'll find his Trump offers better insight into this presidency than the fake news media, with the added bonus of some genuine laughs. Buy the book and audiobook here now.

chuckles for November 21, 2018

Thanksgiving Day 2018

     Thanksgiving in America is held every fourth Thursday in November, and is the best of all the holidays that gather families and friends around a common celebration.
     Personalities aside, this is one holiday that is a no-pressure deal.
     Nobody gets gifts or is expected to do more than show up, eat, drink and refrain from getting too overserved so that you don’t get into a mix with old Uncle Al, or that other occasional family member that you just can’t stand.
     The occasion was created as a national day of thanks around a special meal, as (reportedly) the first Pilgrims had on November 11, 1621, one year after landing at a place called Plymouth, Massachusetts.
     Thanksgiving is now known in more modern terms for the big parade in Manhattan, New York, and other special television sporting events, especially American football, which is usually not broadcast on any other daytime Thursday otherwise.
     But the thing about Thanksgiving is that, no matter where you are from, Thanksgiving is an American thing to do.
     So in every corner of this great land, from California to the New York islands, on up into Alaska and down to Key West, Florida, Christians, Jews, Muslims, Hindus, and agnostics, whites, blacks, and every color in between, all put down their differences for a day and agree that traditions of love, family, and good food are the order of the day.
     In America, when you say “Happy Thanksgiving" nobody looks back and says, “That’s not my holiday.”
     Already, people are revving up for the next holiday—newspapers and shopping channels on TV are full of ads for Christmas.
     But beautiful Thanksgiving will have none of that.
     In fact most stores that sell turkeys, the traditional meal of the day in America, are either giving them away or offering the feast birds at or below cost.
     Not a good day for turkeys, to be sure.
     But if memory serves, when I lived on the farm, turkeys were the dumbest animals imaginable.
     Anytime it rained would scurry to get them inside, and some of them would look up and drown!
     So here’s to Thanksgiving: a day of peace, quiet, and reconciliation.
     Air Cargo has done its part delivering meals to the U.S. troops still stuck overseas, and we can all be thankful to air cargo for that.
     Some Americans pass the feeling along by working for a day serving meals in a Salvation Army kitchen or delivering food to the needy.
     But it is the small and mostly unreported concern toward each other, reflected in small gifts of food and open invitations of welcome to others, that should be recognized as an important expression of Thanksgiving.
     Individual acts of kindness have always been the spirit of Thanksgiving, as we gather friends and family at the table, hold hands, and sing:
               “We gather together to ask the Lord’s blessing:
               He chastens and hastens his will to make known.
               The wicked oppressing
               Cease them from distressing
               Sing praises to his name
               He forgets not his own.”

      Hooray for the pumpkin pie!

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Remembrance Sunday
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UTIKAD Open House@Logitrans
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Vol. 17 No. 78
If Peak Is What You Seek
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Publisher-Geoffrey Arend • Managing Editor-Flossie Arend • Editor Emeritus-Richard Malkin
Film Editor-Ralph Arend • Special Assignments-Sabiha Arend, Emily Arend

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