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   Vol. 16 No. 7
Thursday January 19, 2017
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Business Voxpop Looks At Asia 2017

Business Vox Pop Looks At Asia 2017

     FlyingTypers’ “voxpop” of Asia’s leading air freight forwarding executives finds optimism for 2017 across the industry…
Lucas Kuehner      Leading air freight forwarders predict a strong start to next year after an encouraging end to 2016. But much depends on continuing strong growth on Asian lanes.
      Lucas Kuehner, global head of Air Freight at Panalpina, said all the air freight forwarding lanes that had seen the most growth last year were Asia-related.
      “We have had significant growth from Asia to Europe, Asia to the Middle East, Asia to Latin America, and also within Asia,” he told FlyingTypers. “We expect this to continue in December, albeit at a slower pace and with more movement in comparison on the Europe to Asia trade lane.”
      He also said 2016’s peak season had been significantly stronger than in 2015. “In fact, it was the strongest we have seen since the financial crisis,” he added. “We saw the traditional Thanksgiving and Christmas rush in full swing. After a little dip a couple of weeks ago, demand has picked up again, especially on the Asia to Europe trade lane.
      “There were several root causes for this peak season, from a year-end rush to last-minute ocean freight conversions and new cargo flows from e-commerce.
      “The peak ex-Asia lane has been extremely strong from China and Hong Kong, but also from the traditional airline hubs Korea and Taiwan as well as Vietnam, and to a lesser extent from elsewhere in Asia.”
      Michael Yip, CEVA Logistics’ SVP Freight Management for South East Asia, also reported that the 2016 peak season in Asia had been stronger than in previous years, mainly due to cuts in carrier capacity, but also because of market factors including “new product launches from the technology sector, heavy movement of fashion goods, and to some extent mode shift from Ocean to Air as a result of Hanjin Shipping’s bankruptcy.”
      Li Wenjun, SVP, Air Freight, Asia Pacific and Head of Air Freight, China, DHL Global Forwarding, told FlyingTypers that high-tech products and ecommerce shipments drove demand in Q4, especially on Europe-Asia and Asia-Europe lanes. While electronic shipments were expected to slow in the second half of December, there was “huge demand for e-commerce shipments, which will continue to grow.”
   Li Wenjun   He added: “Different types of shipments drive our trade from Europe to Asia while high tech and Fashion & Apparel shipments are the key drivers for our trade from Asia to Europe.”
      In contrast to previous peak seasons, imports to Asia have also been a key growth market. “We witnessed a new peak season developing from Europe to Asia,” said Kuehner. “There was significantly higher demand on this route in December than earlier in the year.”
      Looking ahead, Wenjun said the early Chinese New Year would see higher levels of demand continue in January, but would not result in a major overall boost to Q1. “We do anticipate the demand to continue till Chinese New Year, so the volume in January should be higher than usual,” he explained. “However, with February being a shorter month in addition to the Chinese New Year, there will be a lower production volume, especially out of Greater China. In addition, we expect the airfreight market baseline rates ex-Asia Pacific to increase in 2017, compared to 2016.”
      Yip argued that although the gains of late-2016 were largely seasonal, the demand pick-up could be prolonged due to the early Chinese New Year holidays in 2017, which fall late this month. This would likely prompt a surge in January demand ahead of factory closures. “Thereafter we expect the usual drop, following a pattern similar to post-CNY this year,” he added.
      Kuehner said low inventory levels that had to be replenished drove the Q4 cargo surge, amplified by a stronger than expected holiday peak season driven by consumer goods. “Electronic launches played a role, but maybe not as much as in previous years,” he added.
      “January and February are traditionally slow months. It’s too early to say if the current peak will extend into the first quarter.
      “However, we are optimistic and expect better market growth in the first half of 2017 versus 2016.”
SkyKing

If You Missed Any Of The Previous 3 Issues Of FlyingTypers
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Access specific articles by clicking on article title
FT120616Vol. 16 No. 4
Uplifting Reports Of Cargo Surge In 2017
Chuckles for January 11, 2017
dnata 2017 Growth Despite Tough Year
Why FIATA Malaysia Matters
Letters to the Editor
FT120616Vol. 16 No. 5
Goods Go Deep As Oceans Rebound
Chuckles for January 13, 2017
Smack Dab In Supply Chain Middle Mile

FT120616Vol. 16 No. 6
United Bellies To Top Of The World
Chuckles for January 16, 2017
Old Is New For Ethiopian
The Importance Of Jan Meurer
My President Was Black

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