Analysts
and leading forwarders now believe air freight pricing
and volume gains this summer could last until deep into
the fourth quarter after August and September demand
ticked upwards.
 “The air freight market
has picked up a bit and this is expected to be continuous
until the second or third week of November,” said
Paul Tsui, managing director of forwarding and logistics
operator Janel Group and the immediate past chairman
of the Hong Kong Association of Freight Forwarding &
Logistics and the Federation of Asia Pacific Aircargo
Associations.
Buttressed by new product launches
in the summer, Drewry’s East-West Airfreight Price
Index - a weighted average of all-in airfreight "buy
rates" paid by forwarders to airlines for standard
deferred airport-to-airport airfreight services on 21
major East-West routes for cargoes above 1,000kg - posted
a 0.7 point rise in August to climb to a reading of
87.5, representing an average price of $2.84 per kg.
This supported bellwether figures
out of Asia for August when Hong Kong International
Airport reported an 11% increase in transhipment traffic,
and Cathay Pacific posted a 3.8% year-on-year increase
in cargo and mail uplift, with freighters on North American
routes “generally full” demand “robust”
and “momentum for exports out of Hong Kong and
Mainland China building,” according to Cathay
Pacific General Manager Cargo Sales & Marketing
Mark Sutch.
 The August increase in Drewry’s
Price Index consolidated a six month run of rising rate
levels and dragged the index up to its highest level
of the year, although it remained 6.9 points down compared
to the same month of 2015 and was still the lowest August
level since the index was first launched in 2012.
However, Drewry predicted further
gains when September’s numbers become available,
not least due to the supply chain chaos that has followed
the bankruptcy of Hanjin Shipping as reported extensively
in FlyingTypers.
“Pricing is expected
to have recovered further in September thanks to tighter
short term container shipping capacity conditions following
the collapse of Korean ocean carrier Hanjin Shipping,”
said Drewry.
Sutch was also upbeat. “We
are planning to operate our maximum freighter schedule
over the coming peak to match with the forecast demand
from various new product launches,” he said in
mid-September.
Late summer product launches
by electronic companies including Microsoft and Apple
have seen volumes pick up in recent weeks and may have
boosted the short-term outlook, according to Sebastiaan
Scholte, CEO of Netherlands-based air freight road feeder
specialist Jan De Rijk Logistics. “Hanjin’s
demise may also have been a factor as not all their
containers have been cleared and some of the cargo will
have been flown, so we’re busy now.”
Elsewhere, Stifel’s Airfreight Logistics
Index recorded a 0.1 point rise in September, taking
it to 49.3 helped by ‘forward-looking’ six-month
expectations improving.
“For the current air
freight situation, lanes between Europe and Asia recorded
poor performance, whilst those between Europe and the
U.S. achieved gains,” said the analyst. “Europe
to Asia was down slightly, by 0.1 points to 42.8, with
a more significant fall of 1.5 points to 45.0 on the
Asia to Europe lane. By contrast,
the Europe to U.S. lane improved by 0.1 points to 46.7,
with the U.S. to Europe lane rising 1.0 points to 46.1.”
Stifel said that forward expectations
on all lanes except Europe to Asia were up, with Asia
to Europe surging 0.8 points to 56.5, and U.S. to Europe
improving by 0.9 points to 55.2. The most significant
gain was recorded on the Europe to U.S. lane, which
rose by 3.3 points to 56.2.
However, Scholte was pessimistic
about the long-term future of air freight yields and
margins. “I honestly can’t see any reason
for growth over the next two years,” he added.
“That’s across the globe. Passenger capacity
is growing so much faster than freight and this means
overcapacity and poor yields for airlines which is not
good and not helped by world trade being stagnant.”
Drewry was also pessimistic
about the air freight supply-demand balance. “Despite
the recent recovery, Drewry expects airfreight pricing
to remain under pressure for the rest of the year as
air cargo capacity continues to expand at a faster pace
than demand,” concluded the analyst.
SkyKing
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