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April 2 2018

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April 2 2018 | The Journal of Commerce 15 International Maritime ALIGNING CAPACITY WITH fluctuating demand and sticker-shock pricing is always a tough dance in the air cargo spot market, but sharply rising volumes and lift constraints today are buffeting shippers and forwarders, with no swift solution in sight. Historically, a full 50 percent of this volatile "boom-bust" marketplace has been driven by emergency shipments plus business cycle or seasonal demand factors, Mike Piza, senior vice presi- dent of Apex Global Logistics, said last month at 18th Annual TPM Conference in Long Beach, California. "But there's a whole new paradigm in the air market today," he added. "A few years ago, it was too much capacity and low volume, 'just in time' and emergency shipments. Now, it's speed to market that is straining capacity everywhere, especially in peak seasons that seem to be getting longer." Sanne Manders, chief operating of- ficer of Flexport, a San Francisco-based digital freight forwarder and customs broker, said demand growth in 2017 was stronger than anticipated. "You saw a rise in e-commerce and in freighters fly- ing full directly from China to the US." But while volumes were large, actual tonnage was not, Manders contends. "When you get a parcel from Amazon, there's a lot of air in that parcel, so air is filling up the plane very quickly with volumetric cargo." Adding to the demand for air cargo capacity last year, Manders said, were a series of new product launches of electronic goods manufactured in China, most notably the suite of Apple iPhones. On the supply side, capacity Pressure rising E-commerce adds to speed-to-market demand and leads to ascending air cargo rates By Chris Barnett and Greg Knowler Importing & Exporting | Ports | Carriers | Breakbulk | Global Logistics

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