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Asia Pacific's air cargo unravels as virus creates havoc on supply chains

THE coronavirus outbreak is presenting the air cargo industry in the Pacific Rim and Asia Pacific with massive challenges, reports Massachusetts-based Logistics Management

Asia Pacific's air cargo unravels as virus creates havoc on supply chains

THE coronavirus outbreak is presenting the air cargo industry in the Pacific Rim and Asia Pacific with massive challenges, reports Massachusetts-based Logistics Management

24 February 2020 - 19:00

THE coronavirus outbreak is presenting the air cargo industry in the Pacific Rim and Asia Pacific with massive challenges, reports Massachusetts-based Logistics Management.

Association of Asia Pacific Airlines (PA) director general Andrew Herdman pointed out that regional cargo carriers are strictly following the guidelines drawn up by the International Civil Aviation Organization (ICAO), in consultation with the World Health Organization (WHO), the International Air Transport Association (IATA) and Airports Council International (ACI).



However, Mr Herdman takes issue with a number of governments that have introduced additional measures including travel advisories, border entry restrictions and quarantine requirements.



'Regrettably, some of these well-intentioned measures seem to lack any proper public health justification, while causing significant and widespread disruption to travel and trade activities across the world,' Mr Herdman said.



'Arbitrary restrictions and blanket travel bans are inconsistent with the International Health Regulations, and result in unnecessary inconvenience and added uncertainty among members of the public. Governments in Asia and elsewhere must strengthen dialogue and work together.'



Still, he admits that at this 'critical juncture,' improved co-operation and co-ordination by international organisations, national governments, health authorities and everyone involved in combating this global health emergency are of overriding importance.



'Asia Pacific airlines are fully committed to working closely with the relevant governments and national health authorities to support such efforts in the wider public interest,' he said.



According to IATA, while the eventual impact of the coronavirus on the global economy has yet to be measured, trade tensions were at the root of the worst year for air cargo since the end of the global financial crisis in 2009.



'With all the restrictions being put in place for Asian airlines, there will certainly be a drag on economic growth,' said IATA director general Alexandre de Juniac.



Asia Pacific airlines last December posted a drop in demand of 3.5 per cent compared to the same period a year earlier. Capacity rose by 2.8 per cent. The full-year 2019 saw volumes decrease by 5.7 per cent, while capacity rose by just 1.1 per cent.



As the world's main manufacturing region, international trade tensions and the global growth slowdown weighed heavily on regional air freight volumes in 2019. Within-Asia freight tons were down eight per cent compared to a year ago.



Blue Silk Consulting president Rosemary Coates observes that several of her clients are still busy trying to figure out how to get shipments out of China.



'Airlines and air cargo operations that had been on a restricted Chinese New Year holiday schedule last month, are now completely suspended,' she said.



'Many of the factories and logistics warehouses are on extended leave, not only in Wuhan, but also Guangzhou, Shenzhen and Shanghai. Hong Kong, with recent protest problems of its own, is also restricting incoming people and shipments from China and outbound flight operations.'



Furthermore, some factories are being ordered to stay shut, with workers afraid to go back to work even if their factory is open.



Ms Coates says that some companies are trying to source parts to stock up on inventory, to try to outlast this critical virus period. This in turn, will eventually cause shortages of all kinds as companies pay premium prices and hoard parts.



Yet even if some parts start to trickle out of China, enhanced screening for the virus at airports and all China border crossings are expected to trigger significant delays.


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