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A tale
of two (intertwined) continents.
Doubts are swirling around the European economy,
but bearish economic sentiment is not dimming the optimism of some operators.
Over in Asia, meanwhile, some analysts predict
that some air freight lanes could benefit this year from the ongoing fallout
around the U.S.-China tariff war.
God Bless
This Mess
With Britain a chaotic mess of political
indecision ahead of its scheduled ‘Brexit’ from the European
Union on March 29, with the potential scenario that a no-deal Brexit will
see a divided country sleepwalk off an economic cliff into a recession
grows by the day.
Elsewhere in Europe the news is equally
bleak. Italy is, well, Italy, France is beset by protests and Germany
may have avoided entering a technical recession in the final quarter of
last year, only because Q42018 was a day longer than Q4 2017.
Populism & Protectionism
In the East, populism and protectionism
are finding political traction, while on the Mediterranean, Turkey’s
ongoing economic and political challenges are observed.
 Great
Expectations
The World Bank now expects the Eurozone
to see the rate of GDP growth slow every year over 2017-2021.
FIS predicts that China-Europe air freight
pricing will increase in February around Chinese New Year, before slumping
until at least May, while Paul Mullins, Vice President of Non-Vessel Operating
at Xeneta, expects European freight markets will slow this year.
“In airfreight, Brexit sees the industry
look at alternatives, possible forward stocking locations, also servicing
mainland Europe through Middle East hubs avoiding going through the UK,”
he told FlyingTypers.
Bubbly Across
The Waves
“Ocean freight could still see continued
increased volumes of recent months, as importers try to avoid the higher
duties in the U.S., as well as trying to mitigate the risk of disruption
in Europe.”
Say The Word
 Andreas
Pauker, spokesman for Lufthansa Cargo, said although Europe’s export
numbers were weaker than expected in the latter part of 2018, he was optimistic
about 2019 with “positive demand” growth predicted both globally
and for Europe. Indeed, Lufthansa is bulking up its European capacity
by offering customers three additional Boeing 777F capacities this year.
Lufthansa Cargo will operate two and AeroLogic, the carrier’s joint
venture will operate one.
“Those routings are not fixed yet,
as we manage our freighter network flexibly to best meet our customer’s
demand,” said Pauker.
“Overall, I assume that the destinations
in Asia will remain very important for our freighters.
“Basically, we’re striving for
balanced inbound and outbound traffic, also on these lanes.”
Asia Pacific
Growth Deepens
Indeed, even with doubts around Chinese
economic growth deepening, Asia’s exports will, as usual, provide
a solid foundation for global air freight optimism in 2019. Cathy Roberson,
founder and head analyst at U.S.-based consulting firm Logistics Trends
& Insights, said the continent would remain a major growth region
for air freight forwarders and 3PLs this year.
 Looking
For A Few Good Forwarders
“In our latest forwarding white paper,
58% of survey respondents indicated that APAC would see the greatest demand
for forwarding services in 2019,” she told FlyingTypers.
“A number of forwarders have made
investments in the APAC region which seems to indicate optimism for the
region.” For example, Panalpina opened a six-floor facility in Singapore
in July.
The company noted that 96 of its top 100 global customers have a base
in Singapore and that the majority of the space at the multi-purpose facility
is rented out to customers. Meanwhile, in October last year, Kuehne +
Nagel acquired Wira Logistics, based in Indonesia. The strategy behind
the acquisition is to strengthen Kuehne + Nagel’s nationwide warehousing
and distribution network in Indonesia.”
Growth Inter-Asia Expected
Roberson expects intra-Asia air freight
to be a growth area for air freight this year. “I think the positives
will be regional air freight growth demand for APAC as well as to/from
emerging markets in Africa, the Middle East, South America,” she
said.
“Negatives will be the U.S., thanks
in part to tariffs but also the need to draw down on inventory build-ups
incurred ahead of tariff announcements. Europe is slowing and I don't
think demand will be strong in 2019.”
 View
Upward Down On The Ground
Stewart Sinclair, Managing Director of Bangkok
Flight Services, one of the two leading freight ground handlers at Bangkok’s
Suvarnabhumi Airport, Thailand’s main gateway and a regional hub,
was downbeat about the outlook for 2019.
“I expect that trade will slow down
globally and it’s possible that we could have a recession by end
of 2019,” he said. “I think there will be a near-term drop
in trade as a lot of customers have been shipping goods ahead of the planned
tariff increases so we have had a bit of a false end to 2018.
“Another factor that may hit Thailand
is the slowdown in the hard drive market because of the move to cloud.
Whether this will result in the major hard drive manufacturers looking
to convert their facilities in Thailand into phone production remains
to be seen.”
View from
Hong Kong Wu
 Brian
Wu, chairman of the Hong Kong Association of Freight Forwarding (HAFFA),
said he was uncertain about how Hong Kong forwarders would fare this year
given the doubts surrounding the Chinese economy, and the potential for
some export traffic aimed at the U.S. market being moved out of mainland
China locations, a move that has already hurt some HAFFA members.
“I am not quite sure about the market
situation in 2019, despite what we have heard about the trade war,”
he said. “We are seeing the relocation of manufacturers from Mainland
China. There are so many uncertainties. We are worried about the situation
of Q1 and Q2.”
SkyKing
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We
recall a letter received during the Lunar New Year celebrations in 2006
from our friend and editor in Frankfurt, the late Guenter Mosler. 
Vol.
18 No. 6
Vol.
18 No. 7
Air
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