Announcing its quarterly
results during the latter third of October, Panalpina reported 4 percent
growth in air freight over the first nine months of the year as volumes
handled reached 629,800 tons, a result it claimed was “slightly
ahead of the market.”
 Although
the Switzerland-based company’s gross profit per ton from its air
division was down 5 percent at $788, which left gross profits stable,
the return to volume expansion provided a much needed fillip during a
period of restriction at the Swiss forwarding giant, with air freight
growing at a much higher rate than the 2-3 percent the company had predicted
after the first quarter.
Sou Ping Chee, Panalpina’s regional
head of air freight trade lane and procurement manager in the Asia Pacific,
said that Asia’s exports remain a critical component of Panalpina’s
air freight strategy.
He told FlyingTypers that after
a strong first half of the year, momentum had continued to build for a
significant peak season ex Asia in 2014.
“Out of Asia there are indications
of a strong peak season this year for several reasons,” he said.
“Capacity has been withdrawn aggressively
in the last 18 to 24 months, suggesting potentially tight capacity now.
But more importantly, there are signs of stronger year-end demand, especially
on the transpacific eastbound because of a stronger economic environment
and a number of new high-tech product launches.”
Indeed, Ping Chee said that carriers had
helped bring more stability to the market by adjusting supply out of Asia.
“We have seen many airlines taking aggressive steps to reduce freighter
capacity, in particular out of Asia,” he said. “Many legacy
carriers have reduced their capacity or in some cases completely exited
the freighter market of late. We have therefore witnessed a drastic reduction
in direct capacity from Asia to key U.S. and European markets.
“The only exceptions are the Middle
Eastern carriers.”
However, the market out of Asia also faces
stern headwinds, not least due to advances in technology. “Miniaturization
of cargo in particular has had a huge impact on air freight ex Asia,”
he said. “The weight per shipment in this market has been dropping
over the years.”
But the threat of re- and near-shoring has
so far not bitten deep into margins. “We have not seen a significant
impact of OEMs relocating back to developed markets such as the U.S. or
Europe,” he said. “However,
if this development is to take root, it will definitely have a huge impact
on China.
“New OEM sites in Vietnam and Indonesia
have already affected cargo flow out of China. The impact has been felt
more in Shanghai as we see more volatility and generally a less robust
market there compared to previous years, but not so much in South China
and Hong Kong.”
But despite the transfer of some manufacturing
activity to locations outside China, interior regions still offer rich
potential. “In comparison to Shanghai, the market in West China
is still relatively underdeveloped and nowhere near the scale of Shanghai,”
said Ping Chee. “A few big original design manufacturers and corporations
still dominate production there, so the region lacks the diversity of
traditional hubs such as Shanghai and Hong Kong.
“But we are constantly looking into
possibilities of expanding our footprint in West China. We believe the
automotive and high-tech industries are key drivers for growth in that
region.”
SkyKing |
