Reklam
Reklam
Reklam
Reklam
Reklam

Air cargo in tailspin as shippers seek to low labour cost hotspots

THE International Air Transport Association's (IATA) World Cargo Symposium speakers have much to say about impact of US-China trade row, shifting production to low labour parts of Asia, where carriers suffered a 3

Air cargo in tailspin as shippers seek to low labour cost hotspots

THE International Air Transport Association's (IATA) World Cargo Symposium speakers have much to say about impact of US-China trade row, shifting production to low labour parts of Asia, where carriers suffered a 3

21 March 2019 - 19:00

THE International Air Transport Association's (IATA) World Cargo Symposium speakers have much to say about impact of US-China trade row, shifting production to low labour parts of Asia, where carriers suffered a 3.6 per cent drop in international demand in January against a five per cent drop in intra-Asia trade year on year.

IATA chief economist Brian Pearce painted a bleak picture for air cargo in Asia over the next few months, saying the US-China trade dispute has already put pressure on the region. He said the fall in intra-Asia cargo volumes reflected a decrease in components being exported to China for assembly lines as exports across the transpacific declined, reported London's Air Cargo News.



Mr Pearce said: 'It is true that the situation is going to get worse before it gets better. I think we know this just because of the export orders that are in the pipeline.



'We can see that the export order numbers are down and they lead what we see in air cargo by two or three months.



'The last [export order] figures in February were down at their lowest level at least since 2016 so that would suggest to me that the next couple of months, we are going to see a further decline in air cargo volumes.'



He said that IATA has predicted global growth of two per cent this year, however, Asia is expected to slip behind.



However, he was more positive looking to the future, pointing out that China continues to pour money into the economy to boost growth.



'Our baseline expectation is that there will be a [US-China] deal and there will be a turnaround but of course that is a matter of debate,' he said.



'The expectation amongst the economic forecasts is not that we are facing a crisis here. In terms of where the trend is going in this region, it seems to be pretty positive for most economies.'



A panel discussion led by Seabury Consulting managing director Marco Bloeman explored how the trade war was affecting air cargo in Southeast Asia.



Mr Bloeman said that half of air cargo flown between China and the US is now subject to tariffs and if a deal cannot be reached, this could to increase to each and every shipment.



'So, what have companies done in terms of moving away from China to other gateways?' he questioned.



Singapore Airlines senior vice president of cargo Chin Yau Seng said: 'As a result of the uncertainty and the concerns over the tariffs, there has indeed been some movement of [manufacturing] activities coming out of China into the likes of Southeast Asia countries like Vietnam, Thailand, Malaysia.



'China is a huge manufacturing centre and you can't expect a big chunk of it to move overnight - supply chains cannot adjust that quickly.



'What we have seen is that where companies were already thinking of moving manufacturing from China, that case has picked up as a result of the situation.



'Fortunately, we have a strong presence in Southeast Asia so we are benefitting from some of those moves even though this is coming at the expense of some of the China traffic,' pointed out Mr Seng.



Vietjet Air vice president of cargo Do Xuan Quang agreed that manufacturers had been expanding their use of Vietnam, especially hi-tech firms, Japanese companies and some US retailers.



However, he was concerned that the US could introduce tariffs on Vietnam in a bid to tackle the trade imbalance there.



Association of Asia Pacific Airlines (PA) director general Andrew Herdman said the main driver causing manufactures to move production to Southeast Asia is lower cost labour.



'People are diversifying their risk in terms of where they are sourcing as they look at making their supply chains more resilient.



'From an air cargo perspective, we have to respond to that. We have assets that are moveable, but you need traffic rights, you need support on the ground, you need logistics, you need market contacts so you need to cultivate those,' Mr Herdman said.


WORLD SHIPPING

This news 232 hits received.