FIATA/IATA Accord

      For FIATA members, one of the most visible changes evolving in 2017 comes fast on the heels of the IATA/FIATA agreement signed last year at the FIATA World Congress held in Dublin, Ireland.
      The global freight forwarding community views the landmark agreement between airlines and forwarders as paving the way to an equitable partnership. Together, rather than as separate entities, they will deal with the issues and demands of modern logistics.

To Know FIATA Is To Learn

      FIATA is soundly managed, a no-fiddle machine; all is transparent, discussed, and debated at length.
      Some may show impatience at the meetings, but there is a noticeable genteel civility and transparency in the manner FIATA conducts its proceedings.
      At meetings, everybody is heard.
      Some want more electronics and others want more consideration for legacies.
      But to everyone the growth and change occurring in the world-class outreach learning programs and youth initiatives FIATA is developing is unquestionable.
      Without damaging the quality of its standards, FIATA steps off in 2017 to explore new and wider avenues for its education programs.

FIATA Fresh, Everybody Else Is Tired

      The FIATA difference is quite stark. At Headquarters Session this week and later this year, at the FIATA World Congress to be held in Kuala, Lumpur, in October, emphasis is on development and education, networking, and cooperative industry advancement.
      There are some recognitions, like the FIATA Fellow, previously awarded in 2016 to FlyingTypers’ Publisher Geoffrey Arend for outstanding contributions to transportation since 1975.

No Fooling

      FIATA Fellow returns again in 2017, naming a close working partner to the organization at a special dinner held this Saturday, April 1st.

Looking Ahead

      Looking at the record, one discovers that the past of FIATA is fairly long, in fact longer than regular air freight services, longer than most associations, and even longer than the United Nations itself.
      FIATA’s emphasis is on advancing the freight forwarding business and in that effort, as it begins its 91th year as an almighty global organization of 40,000 forwarders worldwide, it is clearly marking its own road ahead.
      See you in Zurich!
Geoffrey

What Up In Hong Kong?

      Hong Kong International Airport, for example, reported that combined cargo carriage over January and February—which removes from analysis the wild card of Chinese New Year because it fell in different months in 2016 and 2017—was up 7.7 percent year-on-year, mostly down to an 11 percent year-on-year increase in transshipments. “Exports also recorded an 8 percent growth,” said Airport Authority Hong Kong.
      Cathay Pacific and Cathay Dragon, both heavily plugged into the key Chinese export market, relayed a similar tale. General Manager Cargo Sales & Marketing Mark Sutch said the Chinese New Year holiday significantly affected volumes in the first half of February, but trade in the region was quick to rebound from the middle of the month, which was soon followed by a pick-up in long-haul trade leading to a full recovery by month-end.
      “It was encouraging to see that inbound loads from North America and Europe held up throughout—albeit on a reduced operating capacity,” he added.
      “Taking into account the changes in the Chinese New Year holiday period this year, we managed solid tonnage growth, a reflection of the overall strengthening of global air cargo demand.
      Sutch predicted final figures for March would reveal a busy month, not least due to “project shipments in the pipeline and the launch of a number of new consumer products.”

Chinese Exports Surge

      But other factors also appear to have made March spring-heeled. Dr. Paul Tsui, Managing Director of the Janel Group of Hong Kong Limited, said exports out of China and Hong Kong had surged in recent weeks, driving up air freight rates. “The market to the U.S. is very promising and the cost has been increased continuously for the last few weeks, and the level is equivalent to the last peak season on September 2016,” he said.
      “For Europe, it is quite stable and there has only been a marginal increase of rate.
      “It looks like we are having quite a good start for 2017, but we are still a little worried about the protectionism policy of Trump, which we’ll carefully monitor.”

Panalpina Love Rates & Volumes

      Panalpina Global Head of Air Freight Lucas Kuehner (right) said rates and volumes were surging out of Asia, but particularly out of Shanghai. “The quarter-end volumes are strong, and there is continued ocean freight to air freight conversion, adding tonnage to the market,” he added.
      “Furthermore, several carriers cancelled flights, or had aircraft in maintenance, which reduced available freighter capacity.”

April No Fooling

      Apart from China, “Korea and Vietnam have seen capacity constraints both for Europe and Transpacific,” but he said in terms of forward outlook, it would be premature to make judgments during the quarter-end rush. “We need to wait until mid-April,” he said.
      “We do expect things to cool down, but this also depends on the ocean carriers and what they do in terms of blank sailings.”
      Multiple reports have suggested recently that Chinese carriers have been pulling out freight capacity, not least on U.S. lanes.

DHL Notes Skewed Schedules

      Li Wenjun, SVP, Air Freight, Asia Pacific and Head of Air Freight, China, DHL Global Forwarding, said markets had indeed been skewed by changes in freight schedules. “We have seen a reduction in capacity from Asia Pacific to the U.S. and EU, particularly China to U.S./EU,” he said. “We foresee reduced capacity to continue from Hong Kong and Shanghai to Frankfurt and Chicago.”
      He predicted market demand should stabilize in the coming months, but anticipated it would surge again in August and then continue for the rest of the year.
      “Traditionally, the demand has been with China outbound into U.S. and EU, but with e-commerce, we are seeing a surge in volume in China for both inbound and outbound during peak seasons,” he explained.
      “Another concern is that carriers might be reducing freighter capacity during peak seasons, which will further increase the capacity crunch that is much needed during the peak seasons.”
      Wenjun said DHL had recorded strong demand in the lead-up to Chinese New Year, but had then seen a slight decline in volume in the month of February.
      “However, the Asia Pacific air freight market picked up again in the beginning of March, with multiple carriers reducing capacity in the market, which has driven rates up,” he said.
      “Among the key trading regions, traffic to and from North America, Europe, and Southeast Asia showed the most significant increases.”

Some Results Vary

      However, elsewhere in Asia the picture is varied. Out of Bangkok, one leading handler told FlyingTypers he had only seen “modest growth in the first quarter,” but there was still adequate capacity.

Bangla Booming

      Bangladesh, however, has been a different matter. The airports are struggling to cope with heavy demand for exports of textiles and garments, not least due to congestion at ports. One leading intra-Asia liner shipping operator told FlyingTypers there was no sign of the country’s ports helping ease airport congestion in the near future.
      “The ports are very bad for congestion and have been bad now for a very long time,” he said. “I don’t see any light at the end of the tunnel at least until Ramadan, but it is likely anyway that congestion will return a couple of months after that.”
SkyKing