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Cargo

Rising tide

After years of slow growth in the aftermath of the global financial crisis, the worldwide air freight market is finally bouncing back, and the Europe-Asia trade lane is at the forefront, as Rob Coppinger discovers
 

Arising tide lifts all boats – or freighters – and  the Europe-Asia trade lane is benefiting not only from a buoyant worldwide freight market, but from congestion on sea lanes.


Freight traffic in all major international markets is growing at around 10-15% year-on-year, according to IATA’s 3Q17 Cargo Chartbook. The association points to world trade volumes growing by 4.1% year-on-year during the 1H17 – “the strongest start to a year since 2011”.


US freight forwarder Tigers Global Logistics says its experience reflects the IATA data. “During 2017, we have seen steady growth on the lane, on all modes. Our European and American customers source in Asia, growing their business both B2B and B2C, and that’s impacting our work,” says Shahar Ayash, Tigers’ Regional Managing Director for Europe.


The IATA Chartbook identifies carriers based in Europe and the Asia-Pacific as making substantial contributions to annual growth in freight tonne kilometres (FTKs) in the three months up to July. It also shows that the Asia-Pacific region had the largest share of FTK growth in both the 2Q17 and 3Q17, compared to the other areas of the world. According to IATA however, 3Q17’s FTK increase was largely driven by North American airlines.


This is reflected in IATA’s data, where the North America-Asia trade lane has enjoyed success comparable to the Europe-Asia vector. That could be in part due to the Apple iPhone, according to Ayash, with the buzz surrounding a new launch driving demand and with cargo rates on the rise as capacity declines.


From December 2016, international FTKs in billions increased from just under 10 billion to just above, with intra-Asia and Europe-North America routes showing more sluggish growth in 1H17. Still, it was a notable increase compared with the almost flat performance seen since June 2012, and overall, the tide is rising worldwide, reflected in a flurry of announcements from airlines.


In May, Lufthansa Cargo – which launched a cooperation with Cathay Pacific Cargo from Hong Kong last year – announced that its Guangzhou route would from July see an additional weekly flight, totalling five services a week. It also added two more weekly connections to its Shanghai service from September, for a weekly total of nine flights, routes which are served by Boeing 777 freighters, replacing the MD-11 freighters that had been operating the Shanghai route.


A month before Lufthansa’s announcement, AirBridgeCargo Airlines (ABC) launched its twelfth destination in the Asia-Pacific, with twice-weekly Boeing 747 freighter services to Taipei, doubling its route network in the region in the last two years.

 

ABC’s volumes rose 25% out of the Asia-Pacific in 2016 to more than 265,000 tonnes. This year has also been good for the airline: “This year [the volume increase] took the pace of gradual recovery, which is reflected in 17% growth of our tonnage on the Europe-Asia lane both ways,” reports ABC’s General Director, Sergey Lazarev.


The Europe-Asia trade lane is the biggest market for ABC, with 79 Boeing 747 freighters departing every week from the region, serving 12 cities in Asia from Europe via its Moscow hub. Lazarev says: “With Asia-Europe and Europe-Asia tonnage taking up to 61% of ABC total volume, the planes will keep a major part of their flight hours between Asia and Europe and back.”


The Taipei service will operate from Moscow Sheremetyevo every Wednesday and Saturday, returning via Hanoi. “Taipei is a mature and stable air cargo market generating volumes close to 500,000 tonnes per annum, so it is a major origin, destination and transit point for freight. This includes exports of electronic components, machinery, textiles, as well as a diverse range of import cargoes,” Lazarev said at the time. >>


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