India trade likely to help carriers ride out the storm

Los Angeles: Air freight will face an extremely challenging year in 2009, but pockets of growth will be found, particularly in US-Asian trade, predicted Gloria Whittington, managing director, DAX-Dependable AirCargo Express, an air freight forwarder that specialises in US-Asian and South Pacific trade.
"Greatest growth, on the order of a 10 per cent increase, is expected to be in US-Indian air cargo as that nation continues to expand its production base in a number of hi-tech and traditional industries.
"China, the perennial leader in cargo growth, will fall behind India in its growth rate to about eight per cent, down sharply from its usual double-digit increase as production in that nation slows, reflecting lower demand from outsourcing manufacturers.''
Whittington said there definitely would be less growth in 2009 than in past years due to the economic slowdown. "We expect a growth rate of no more than two per cent in the year ahead, down sharply from the eight to 10 per cent growth rates air cargo has enjoyed in the past."
Comparing the growth of air freight, however modest, to an expected sharp decline in ocean volume during the coming year, Whittington explained this discrepancy by noting that "types of cargo carried by air generally consists of high-value industrial items or hi-tech components and finished products which are less vulnerable to an economic slowdown. Ships, however, move primarily a wide range of consumer goods whose importers have been hard hit particularly by consumers' pocketbooks slamming shut during this current recession."
She sees greater use of the just-in-time (JIT) system for delivering parts and components for assembly line production as manufacturers attempt to decrease inventory levels to an absolute minimum.
Whittington also sees a strong potential for growth in the field of project cargo. "The project cargo segment of the transportation business always has been dominated by ocean carriers. Air never has played a significant role in this segment of the market. However, a greater number of heavy equipment makers are finding that if freight is properly disassembled, large cargo aircraft such as the Boeing 747-8 and the Russian-built Antonov can accommodate heavy loads with deliveries even to remote mines and oil fields in a matter of hours rather than weeks."
15/12/08 Cargonews Asia, Hong Kong

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Categories: cargo Dec 2008, Foreign Dec 2008