News

Forwarders predict a slower peak season for 2019

 

 

By Damian Brett

Description: https://www.aircargonews.net/wp-content/uploads/pics/Data-generic_15-e1557219580894.jpg

Freight forwarders are not expecting to face the same cargo capacity shortages as they experienced on major trades in 2017 and 2018.

Flexport’s global head of airfreight Neel Jones Shah said that in Greater China and Hong Kong, the peak season would be less pronounced that the last couple of years with “mini peaks” centred around US tariff hikes in October and December, and new product launches.

“I don’t see yields being anywhere near where they were last year, either,” he said.

However, he does expect some capacity constraints in Southeast Asia to be driven by airport capacity shortages.

“In terms of Southeast Asia, if demand follows current patterns, demand will soon outstrip supply in markets such as Vietnam, and potentially Malaysia and Indonesia.”

“On a macro level all signs are pointing towards a global slowdown,” he said. “But US consumers are continuing to spend money, which could help salvage this year’s peak season.

“It’s still a bit too early to tell how much this will impact raw demand for airfreight.”

On capacity, Shah said that Flexport has secured a number of Block Space Agreements (BSA), while it also offers its own US B747 freighter service out of Hong Kong.

“I do not anticipate that we will sign anymore BSAs or charters for this peak season. Instead, we’ll likely procure what we need on the spot market,” he added.

“The market is simply too unpredictable and the risk is too great to procure additional capacity before demand officially materialises.”

Agility Global Integrated Logistics (GIL) senior vice president of airfreight Michael Blaufuss told Air Cargo News that he is not expecting the 2019 peak season to be as strong as that of the last couple of years.

“This comes down to the changes that the market has seen recently, and it not being as strong as before,” he said.

“This will ultimately result in an overall reduced cargo flow, despite the demand still being high.

“With regards to capacity shortages, we don’t expect this to be as prominent as it has been in previous years.”

He added that there were various reasons for the softness, including the China-US trade dispute and the protests in Hong Kong.

He said that the company had adjusted its BSAs a few months ago in line with demand and it is not expecting to require extra charter capacity.

“Looking forward we need to be aware that new volatilities emerge all the time,” said Blaufuss.

“The most recent being the oil attack in Saudi Arabia, and the market is likely to see the consequences of this very soon.

“There are lots of unknown, uncontrollable factors for this industry and this can make it difficult to predict market changes in the near future.

“However, this time next year, we may be in a better market position once the current external, global factors are resolved.”

Meanwhile, Dachser Air & Sea Logistics head of global airfreight Timo Stroh is expecting a small peak season for imports into the Europe, Middle East and Africa region but “well below the 2018 level”.

For exports from the region, the company said that hardly any extra capacity will be required.

“We expect lower volumes from automotive suppliers and investment goods producers than in the previous year, especially on the China route,” said Stroh.

Tigers president for the Americas Sebastian Tschackert said he was not expecting major capacity shortages on the transatlantic, as it had experienced in 2017, although this could depend on the UK’s exit from the European Union.

“If Brexit does not happen then we are expecting a similar picture to 2018.

“In the event of a hard or chaotic Brexit then we believe there will be a capacity crunch, in particular going into Frankfurt and Amsterdam, as well as other European Union gateways.”

On the transpacific, Tigers is expecting cargo volumes inbound (excluding China) to remain stable with no major capacity crunches.

“Demand is quite balanced,” he said “There is an ongoing surge for cross border e-commerce that is changing the industry, and the ongoing US-China trade war is cooling down the China inbound lane.”

Tigers’ China branch manager Tracey Kwok said that there was no signal of a peak season pick up.

Tigers is currently in the process of mapping out its capacity requirements, but Kwok said that it will be looking to make spot plays and is not expecting to need charter capacity.

 

Another News :

Star Movers Bali   |   Prathama Global Trading   |   XPS Link   |   Chinese Chinese

Copyright © 2015 PT. Prathama Line Logistics