Shippers
welcomed
September's
resumption of
Nippon Air Cargo's
Tokyo-Chicago
route.
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16 The Journal of Commerce
|
November 12 2018 www.joc.com
International Maritime
$10 since early August, and in the same
period, Europe-US rates have barely
moved," the online forwarder noted.
Air cargo shippers on the Chi-
na-Europe routes can expect to pay
an average of $0.50 more per kilo-
gram through 2019 compared with
this year as supply begins to equalize
with demand.
This is the expectation of Freight
Investor Service, although the com-
modity and freight broker said rates,
currently around $2.93 per kilogram
($1.33 per pound), would increase
to $3.55 per kilogram by December.
Asian airlines believe belly cargo and
flexible freighter flights should be able
to handle cargo owners front-loading
shipments ahead of the Jan. 1 round of
US trade tariffs on China.
"There should be enough space
as supply catches up with demand,
but it is still possible to have a
peak like we did last year [2017]," a
spokesman for FIS told The Journal
of Commerce.
The decision by Japan's Nippon
Cargo Airlines (NCA) to resume
flights between Tokyo and Chicago
in September — suspended over
maintenance issues — has added
Air chief operating officer. "This year
the cargo market was very strong, and
we do have a lot of concerns about
next year's market. We are hoping for
a better resolution between the two
countries [US and China] and hope
they can think in terms of consumers
instead of egos," he said.
The International Air Trans-
port Association (IATA) said in its
third-quarter air cargo report that
the inventory restocking cycle
that helped air freight growth to
outperform that of wider global
trade in 2016 and 2017 has now run
its course. The association said this
slowing growth comes against a
backdrop of rising trade protection-
ism measures, and wider momen-
tum in global trade is weakening.
Last year, beginning in October,
air freight prices started ramping up
as demand exceeded supply. Freigh-
tos said carriers have been adding
capacity this year but not enough to
keep up with the continuing growth
of e-commerce shipments.
"Prices have been running higher
than last year, but as of yet, they
haven't started taking off. China-US
general rates have only increased by
urgently needed capacity to the
space-constrained trans-Pacific
routes just ahead of the peak season.
The air cargo market has been
particularly tight this year since
NCA took all 11 of its Boeing 747-8
freighter fleet out of service in June
after Japan's Civil Aviation Bureau
found inconsistencies in the carrier's
maintenance records.
With the resumption of its To-
kyo-Chicago route, the space NCA is
adding to the trans-Pacific trade will
be welcomed by shippers forced into
the air because of an early increase
in demand for ocean freight ahead of
the US trade tariffs.
C.H. Robinson noted that tight
space is pushing load factors up
into the middle- to high-90 percent
range in some cases. "Ocean vessels
are overbooked, so shippers are
coming to us to convert required
shipments to air," the forwarder
said, with China's e-commerce
boom adding extra air volume to
the amount of freight that typically
moves this time of the year.
JOC
email:
greg.knowler@ihsmarkit.com
twitter: @greg_knowler
