– The peak season for airfreight is off to a slow start, says Trans Global Logistics
Soft demand for space has been caused by a number of market conditions, including earlier shipping patterns influenced by China's decision to reduce export incentives; early shipping to avoid the perceived threat of a USWC labor disruption; proactive shipping to avoid west coast port congestion, and cautious holiday shopping projections by retailers that expect sub-prime mortgages to be reset at higher interest rates – and higher fuel costs, the company says.
Throughout the Asia-Pacific region, there has been adequate lift to meet demand, and transit times have been consistent with non-peak periods, says president Robert W. Mooney. On the other hand, fuel surcharges remain persistently high and could be poised for another period of upward adjustment, he continues. Some countries, including Korea and Thailand, have seen export volumes tail off in part because of the rising value of their local currencies.
Looking ahead, most carriers in the region are anticipating demand for space to build later this month and carry forward through October, says Mooney.
Specifically, in China, demand from the Shanghai area has been relatively strong since late August, and carriers have been able to impose rate increases, while transit times have degraded somewhat, says Trans Global.
In North Asia, demand for space is down from last year; however, air carriers in Taiwan and Hong Kong have begun imposing rate increases. ICN is reporting a backlog of trans-shipment cargo in the vicinity of 400 to 500 tons, and freight originating from Korea is being uplifted without delay, the company adds.
In the Indian subcontinent, there is sufficient space to meet demand; rates are stable, and transit times are consistent, except via Europe. Importers should keep an eye on the political situation in Pakistan and be mindful of the start of Ramadan, which will impact operations in Muslim countries, says Mooney.
And in Southeast Asia, most markets have adequate space to meet demand, although Vietnam and Malaysia have reported much tighter market conditions. All markets in this region must contend with slightly longer transit times through regional air hubs, according to Trans Global Logistics.