[261115.EN.AIR] Strong Air Cargo Demand Out Of Asia Is Expected To Slow In Coming Weeks

THE air freight market out of Asia is expected to return to more normal levels over the coming fortnight after experiencing a continuation of strong air cargo demand in the week ending November 20, reported Lloyd's Loading List.com, citing industry sources.

SEKO Logistics' Asia Pacific COO, James Gagne, said most major Asian air freight gateways, including Seoul Incheon and Tokyo-Narita, had backlogs as a result of strong demand and tight capacity, mainly driven by new consumer product launches.

"All the big high-tech product shippers are using air freight now in order to catch the Christmas season and this sees carriers increasing rates on a weekly basis," he said.

"The Transpacific lane (in comparison to Europe) has witnessed a more marked, short-term uptick in rates, given structural demand and seasonal releases (of products)."

Mr Gagne added: "We may have already hit the peak, and the market should return to normal by the first week of December out of airports such as Hong Kong, Shanghai, Seoul, Tokyo and Taipei."

Cargolux's Asia-Pacific vice president, Kevin Shek, confirmed that demand had been boosted by "a rush of new products coming on to the market," with Apple products leading the pack.

"Q4 started off with high demand especially on the Hong Kong-Europe, Hong Kong-US and Shanghai-Europe trade lanes," he noted. "I believe this will last until the last week of November and will gradually slowdown in December.

"Since the middle of last month, we've had many enquiries for additional space ex-Asia, mostly from Hong Kong and Shanghai."

Mr Shek confirmed that Chinese authorities had been limiting charter frequencies ex-Shanghai since November and forwarders were seeking alternative airports to operate charters. "Cargolux is operating several charter flights from Zhengzhou," he added.

AirBridgeCargo Airlines' senior VP for sales and marketing, Robert van de Weg, confirmed the "tight" supply-demand situation in China, the exception being Hong Kong.

"We believe this is due to stronger than expected demand combined with limited charter capacity. In Hong Kong, quite a few charters were added at the last minute, which led to certain carriers having over-capacity. This resulted in 'milder' market conditions in Hong Kong. In China, airport congestion issues has made adding capacity in the short-term more difficult."

Mr Van de Weg said: "For scheduled airlines, the supply-demand ratio has not been bad. New product releases have also stimulated growth - it seems consumers in Europe and the US are ready and able buyers."FAXTEXT = He said Asia-transpacific and Asia-Europe aside, the other main trade lanes are not doing badly either.

"North Atlantic westbound (ex-Europe) is strong, but there is the usual oversupply eastbound. Demand ex-Europe to Asia/China is rather good - not exceptionally busy, but simply solid."

DHL Global Forwarding (DGF) said it was seeing some 'ocean' shippers in the Shanghai and Hong Kong area increasing their air freight shipments in order meet holiday season deadlines.

"Another feature of the market is the restrictions imposed by the Chinese authorities on charter traffic out of Shanghai, Hangzhou and Tianjin airports, until further notice," the company said. This is limiting airfreight capacity out of Shanghai, although overall market demand is still lower than last year, especially on the transpacific route, DGF added.

Source : HKSG.