The air freight demand picture brightened significantly in the latter part of 2016, and trade forecasts are positive. But leading airlines contacted by FlyingTypers are plotting a cautious strategy for the New Year.

By The Numbers

     Nomura’s index of Asia exports (excluding Japan) recently leapt to its highest level since February 2015, promising a return to positive single-digit export growth in early 2017. The index comprises eight forward-looking components and has a three-month lead-time over actual Asia exports, so it bodes well for the air freight industry over the next quarter.
      Nomura is not the only analyst to report unexpectedly strong figures in recent months. HSBC said China’s November export trade growth was the second highest reading in 2016, while import growth jumped to a 26-month high and included a solid performance by ‘ordinary imports.’

Upsurge Drives Trade

     The figures illustrate the upsurge in trade to and from Asia, which is also supported by many of the world’s leading airlines and analysts contacted by FlyingTypers. “Airlines reported continued strong growth in November 2016, in line with the increase we saw in October,” WorldACD told FlyingTypers. “Most regions performed well in November. Especially air cargo volume from Africa, which showed strong year-on-year growth.”

Lufhtansa Comes Back

     Andreas Pauker, spokesman for Lufthansa Cargo, confirmed a return to the traditional peak season in late 2016 and pointed to air cargo shipments from Asia to Europe and the U.S. as fast improving lanes, while key growth sectors included garments, automotive, and high tech products, components, and shipments driven by the e-commerce sector.
     However, not all industry executives were reading from the same song sheet.  

Kerr Concurs, Looks For More

      “Although we were experiencing a stronger peak than last year, it is still far from the traditional peak,” said David Kerr, Senior Vice President, Etihad Cargo.
      “From 2009-2015, the October/November volumes were around 14 percent higher than the average of other months of the year. In 2015, this was only 5 percent higher.
      ‘This year we saw 9 percent.”
      Etihad saw year-on-year gains from in its integrated partner airline capacity volumes, fashion shipments on freighters, which were specifically deployed for this flow, as well as on China to India lanes. “The fashion business out of Zaragoza to China has mainly driven Europe to Asia trade,” explained Kerr.
      “There is also a strong, increased business from Europe to Shanghai, mainly from Zurich and Frankfurt. We have increased by 70 percent in the last three months versus the same period last year on the Europe to Shanghai trade lane.
      ‘This is the result of conscious efforts to increase our market share on our lanes to Shanghai.
      “We also saw a 13 percent increase in electronics traffic in October and November versus the summer from Vietnam.”

Look Ahead 2017

      Looking forward to 2017, airlines are more cautious than the air freight forwarder counterparts recently surveyed by FlyingTypers.
      Pauker said Lufthansa was “cautiously optimistic for demand in January with regards to Chinese lunar New Year,” but said this did not automatically mean this would be a lead indicator for overall improvement in 2017.
      A spokesperson for Air China said that although a stronger peak season in 2016 was very welcome—a development attributed to a “rebound to seasonal demand, new product, as well as moderate capacity deployment in the market”—this did not apply to all markets. He said the carrier was continually adjusting its strategy in accordance with demand.
     “We do expect this trend to last to the second half of December,” he added. “Throughout our network, Transpacific remains our most important route and has been growing steadily, and we also focused on intra-Asia to improve our profitability. Even though with the uncertainty coming along with Brexit, and even the recent referendum in Italy, we see a slow but stable recovery of the Europe market. The depreciation of the Euro and traditional peak season demand drive our east and westbound traffic growth respectively.”
      He added: “Since CNY vacation falls in late January 2017, we anticipate a stronger holiday effect than in previous years.”
      Whether the gains of late 2016 and expected continuation into January will continue thereafter remains to be seen, however. “The air freight market has been growing steadily,” said the Air China spokesperson. “[Next year] declines in the volume of laptops may overshadow the electronic device launches effect.
      “On the other hand, there has been significant growth of perishable cargo and e-commerce, and we expect these volumes to grow continually.”
      He said more new product launches in 2017 would be a positive, but variables such as world trade growth, fuel prices, and expansions in bellyhold capacity could offset gains.
      “Overall, capacity management remains the key to health growth and we shall be careful to adjust our market policy in 2017 accordingly,” he added.
SkyKing

     FlyingTypers is always about people. As the new year begins, we’d like to take a few moments and salute someone very special.
      American Airlines Cargo Managing Director for Latin America Carmen Taylor retired as 2016 came to a close.
      We are told that Carmen had some health issues, and that she is OK now, but decided to call it a career after 36 years at the airline.
      Carmen began at American in Canada in reservations and worked herself all the way up to leading the corporate sales efforts for the entire Canadian market.
      She later served as country manager in Spain, where she spent 4 years living in Madrid.
      Back in 2012, Carmen Taylor—whose responsibilities for American Airlines Cargo included South America, Mexico, Caribbean, Central America, and the southeast region of the United States—was recognized by The Miami World Trade Center for “exceptional leadership in promoting and enhancing free trade and international business.”

      Little wonder, we thought at the time, and a wonderful recognition of a professional career and a life well lived.
      Carmen was supportive and nurturing to both her colleagues and customers. She shared some thoughts with us that can be viewed as words to live by.
       “I love my job.”
       “My philosophy is make the customer successful, and they will also make you successful,” she said.
      Carmen was born in Lyon, France. Of being a woman in cargo, she says:
      “The demands are there—no matter who you are—to deliver all around.”
       “We are very proud of the role we play in facilitating international trade and helping consumers worldwide gain access to a large variety of goods available in the market.”
      “In July 2004, my good friend, Mark Najarian, who was at the time our VP Cargo Sales, gave me an incredible opportunity to run our Cargo Sales business in Miami. Although I was a little nervous at the beginning—since I knew very, very little about the cargo industry—I very quickly learned that the cargo business is a ‘people-to-people’ business.
       “The experience of being ‘real’ with people had an immediate impact.
      “Once you have built credibility within your customer base, they will support you. Working in cargo for the past decade has truly been a very rewarding experience.
      “I feel extremely fortunate that my work with American Airlines has given me the opportunity to travel across the globe.
      “My favorite city in the world remains Paris, as it offers something no other city can.
      “Every time I am in Paris, I find something exceptional, whether it is an old building, a bridge, or a great antique store.
      “Plus, with my family living in France, I am able to make many stopovers in Paris while en route to Lyon, my hometown.
      “I love activities around the arts, including music (opera), live theatre, movies and, of course, like most French people do, I enjoy eating and cooking.
      “I used to be a pretty good skier, but living in Miami Beach makes it easy to enjoy golf.
      “Most weekends I join my husband on the golf course…”

The Last Word

       “Latin America is a region with great potential.
       “Just as American Airlines has been investing heavily in Latin America, so, too, have other companies.
       “This activity continues to open many doors to consumers and industries.
      “For many years, the majority of shipments originating in Latin America had the U.S. as a final destination.
      “Now, a very large share of that traffic ends up in the European countries and Asia, too—including Japan and China.
      “Overall, I am very thankful to have enjoyed a great career and the opportunity to work with some wonderful people and also very grateful to have served a company that I love as if it were my own!” Carmen Taylor said.
Geoffrey

     The construction site of the “Great Stone” China-Belarus industrial park, located 25 kilometers from Minsk, Belarus, is rapidly progressing.
  This is the largest joint project of Belarus and China at a site in a strategically unique location—the geographical center of Europe, at the junction of the Eurasian Economic Union, the European Union, and the new Silk Road.
  Great Stone Industrial Park is being built in close proximity to Minsk International Airport, railroads, and the transnational motorway Berlin-Moscow.
  Great Stone hopes to welcome high-tech companies from all over the world.
  As you read this, 13 km of internal streets, electricity, water supply, sewerage, and gas and telecommunication services are already completed at Great Stone.
  The developers say 20,000 square meters of industrial and commercial space will signal the first phase of Great Stone Park early this year.
More: http://industrialpark.by/en
Geoffrey

Vol. 15 No. 95
A Christmas Story
Chuckles for December 24, 2016