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WorldACD reports steep declines in Asia-Europe cargo demand in October

Air cargo volumes from China and Hong Kong to Europe continued to come under pressure in October, while companies are reporting a structural shift in e-commerce supply chains to the continent. Figures from data firm WorldACD show that overall air cargo volumes from China & Hong Kong to Europe in October were down by 17% year on year. Air cargo volumes from China origins to Europe were down by 8% year on year, while volumes from Hong Kong, described by WorldACD as "a strong origin point for e-commerce platforms", were down by 32%. The decline comes after the European Union introduced a €3 charge for items with a value of less than €150 in July as it sought to tackle the deluge of e-commerce goods being imported into the bloc. However, far from a temporary dip, WorldACD suggests that the decline could be structural. "Many European e-commerce air logistics specialists believe the developments reflect a structural shift, as major international e-commerce platforms make greater use of consolidated business-to-business (B2B) import models for low-value shipments, including via ocean or other transport modes, rather than flying individual business-to-consumer (B2C) parcel shipments," WorldACD said. "An additional €2 per item handling fee for EU imports from 1 November is expected to further limit EU e-commerce air import volumes, which had been a key driver of China-Europe air cargo growth in recent years, although seasonal demand and the continued strength of underlying European e-commerce demand are expected to partly offset that effect." While demand from China to Europe declined, airfreight rates continued to rise, increasing 9% in October compared with September and up 14% year on year to $4.85 per kg. The increase will have been influenced by fast rising jet fuel prices as a result of the conflict in the Middle East. In contrast, total air cargo tonnages from China and Hong Kong to the US in October were up by 8% year on year, with growth from mainland China of 9% and Hong Kong of +4%. "These growth figures are notable, because October last year saw strong volumes when demand had rebounded following the initial challenges posed by last year's fast-changing import tariffs and de minimis rules in the US." From China to the US, rates increased by 7% in October, month on month, to $6.47 per kilo, taking them 30% higher than in October last year. Overall air cargo tonnages for the month were up 6% year on year, WorldACD said.

El Niño transport chaos hits LatAm perishables exports

When it rains, it pours. Agriculture exporters in Latin America's southern cone have struggled with headwinds from weather hitting crops as well as transport routes, on top of gateway problems and high transport costs. Chile's cherry export season got off to a rocky start when truckers staged a protest about high costs that cut off access to the container terminals at the port of San Antonio. They were up in arms over stalled freight rates, rising fuel costs and new charges on the main highway between the port and Santiago. The strike disrupted the official start of Chile's cherry export season that was set to kick off with the sailing of the first 'Cherry Express' to China, scheduled for 9 November, with loading planned to commence two days earlier. San Antonio is the nation's main gateway for marine cherry exports, which have gained ground over airfreight in recent years. The port reportedly handles nearly half of Chile's fruit exports. Industry body Frutas de Chile called for a swift end to the strike, warning that a prolonged stand-off would affect crop quality, as the port was already at 90% of storage capacity. The blockade was called off late on Friday after nine days, following an agreement on an 8% adjustment on overland freight rates and a commitment to implement an indexing mechanism. By that time, however, the first 'Cherry Express' had been diverted to Valparaiso, causing a scramble to move cherries there. For growers, the disruption piled additional grief on a reduced crop of inferior quality as a result of massive rainfall caused by this year's El Niño, which has been flagged as an extreme weather event and affected crops in other parts of South America as well. "Exporters in Chile have been very worried about the situation," reported Federico Calvo, director of Intermodal Logistics. "Cherry volumes are starting up, but not as strong." On 2 November, Chile's Ministry of Agriculture declared an agricultural emergency in parts of the Maule region, an area dominated by forestry and agriculture, especially wine growing. Media reported serious damage caused by rains, hailstorms and strong winds. El Niño also hit Argentine exporters. Snow on the Andean passes and heavy rain repeatedly blocked the main road from Argentina to the Chilean ports, resulting in ten days of closures at the border. Typically, border crossings are closed during the southern winter only for a couple of days, Mr Calvo said. The situation is causing concern for blueberry growers in Argentina and Chile, just as they are poised to benefit from a weather-related slowdown of blueberry exports from Peru. Their northern rivals had thundered to the top of South America's blueberry-producing nations with a rapid expansion of cultivated areas. This year, El Niño has impacted Peruvian blueberry output, opening the door to growers in the south to boost their exports. Proarandanos, the Peruvian blueberry industry body, has lowered its forecast for this year's crop several times. Its most recent forecast, from mid-October, is 6% lower than the projection from the beginning of that month, and down 10% year on year, despite a 15% increase in the acreage for production. Predictions for the fourth quarter flag a decline of nearly 25%. Last week, Peru's Ministry of Foreign Trade and Tourism called a meeting with government agencies and industry bodies to discuss measures to maintain operations during climate-related disruptions. Among the proposals that came up at the event are identifying vulnerable ports and transport routes, evaluating alternative routes and setting up response procedures for logistics disruptions. Chilean and Argentine shippers using or contemplating airfreight to move produce to overseas markets have also faced challenges. The current upgrading of the secondary runway at Buenos Aires' Ezeiza airport involves work on the intersection with the airport's main runway from 26 October to 15 November, which cut the latter's length from 3,300m to 1,850m. Several airlines have suspended flights to Ezeiza for the period, while a few have added refuelling stops in Montevideo or Sao Paulo to reduce take-off weight at Ezeiza. As a result, airfreight pricing has gone up, Mr Calvo noted. He added that fuel surcharge adjustments of several airlines serving the Chilean capital have translated into price increases up to 35% there, which have also been hard to stomach for produce shippers.

Bangkok cargo backlog spreads to exports as airlines restrict inbound freight

A backlog at Thai Airways' cargo warehouse at Bangkok Suvarnabhumi is disrupting imports and exports, prompting airlines to restrict Bangkok-bound freight. Airline accounts on Thursday reported more than 1,000 outstanding cargo lots and 700-800 pallets awaiting breakdown. Neither Thai Airways (TG) nor Airports of Thailand (AOT) has confirmed the current backlog or any recovery date. AOT said today it had allocated Warehouse 4 in the airport's free zone for oversized cargo, and was discussing additional space for international imports with Thai Airways and Customs. It was also working to improve shipment tracking, it added. Thai Airways acknowledged on Friday that rising inbound volumes had left large numbers of unit load devices (ULDs) awaiting breakdown and storage, delaying deliveries, and said it was adding staff and forklifts, seeking more space, and introducing a system to record cargo locations. Missing or inaccurate storage records have compounded the problem, according to the Thai Airfreight Forwarders Association, leaving agents unable to establish when shipments can be collected. Unprocessed cargo also ties up ULDs needed for subsequent flights. Thai Airways said it was prioritising shipments that arrived before 23 October while continuing to handle new arrivals. The Thai Chamber of Commerce warned that delays were raising costs and disrupting production and delivery schedules for manufacturers reliant on imported materials and components. Congested working areas and delayed ULD breakdown were now affecting exports too. Cathay Cargo has restricted Bangkok-bound freight at least until 15 November to intact ULDs that can be released without breakdown at destination, with exemptions for specified temperature-controlled and special cargo. The chamber said Singapore Airlines Cargo had also notified customers last week of temporary restrictions on certain shipments, citing disruption to ULD circulation and outbound handling. UK forwarder Beckchoice separately reported that a 3 November advisory from Thai Airways' Korea cargo office noted limited acceptance of some transit and Thailand-bound freight between 4-8 November to through or unitised ULDs. Warnings predate the latest restrictions. Teleport, Expeditors, and Geodis have all flagged congestion at the TG warehouse over the past two months, affecting inbound and outbound handling. In its latest regional air market update, Expeditors said TG had asked airlines to reduce inbound volumes and had restricted additional charters until further notice. An earlier briefing reported a request to cut inbound cargo by 50% through 7 November. Expeditors also reported longer queues for weighing and export handover at TG, as import breakdown delays prolonged export processing. At BFS, truck waiting times remained around 24 hours, despite some improvement following warehouse expansion. Time-sensitive manufacturing inputs are among the goods exposed. WICE Logistics executive Chudech Kongsunthorn told Thai publication The Standard that data centre and electronics investment was driving equipment imports, alongside shipments of semiconductor and electronic parts, medical equipment, and pharmaceuticals. Cargo normally released within 24 hours was taking days or, in some cases, weeks, he said. Export delays also threaten electronics and other airfreight staples, including fresh food, flowers, gems, and medical goods. The congestion comes amid continued demand growth on some routes: WorldACD recorded a 20% year-on-year increase in chargeable weight from Thailand to the US in the week to 1 November.