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Latest News & Updates

Carriers jump on air cargo demand as southeast Asia prospers

Manufacturing and export activity in Southeast Asia is continuing to grow, but ongoing trade prosperity, and in turn air cargo demand, is far from certain. A change in the White House sent ripples across global supply chains, but for Southeast Asia, the return of Donald Trump as US president only exacerbated an already existent situation. Over the closing months of 2024, rates on airfreight exports out of the region - particularly from places like Vietnam - saw a marked increase against the same period of 2023. Asked how they thought things would pan out over the coming months, one source told Air Cargo News (ACN) that they expected the upward trend in rates to be "sustained" amidst all the talk coming out of the Oval Office of tariffs. For shippers, there was a feeling of frustration, of something of a hand grenade having been hurled into an already precarious situation as part of the western desire to wean itself from a dependency on cheap, Chinese products. Trump's threat to impose tariffs on China has led to further talking up and expectations that this year will be one of ramped up trade diversification towards Southeast Asia, with the likes of Thailand and, in particular, Vietnam seemingly in line for some big wins - not to mention India. Movement in this direction follows the better part of two decades' worth of hype that these countries would become the "new China". Such talk misses the abundance of domestic, as well as access to, vital raw materials that has powered China's growth but, it nonetheless has some footing in reality, with more and more manufacturing and export activity occurring in Southeast Asia. Numbers for Vietnam's 2024 certainly make for positive reading. Exports over the 12-month period jumped up 14.3% against the preceding year, driven by massive demand for electronics, garments, and smartphones - "a lot of which flying express out to customers in Europe and North America" - generating $405.5bn in revenues for the country. There are those, however, who worry Vietnam's recent bonanza may leave it on the hook with the incoming US administration. As far as trade deficits with the US go, Vietnam's trade surplus with the US is beaten only by China and Mexico. Economists, including those at Goldman Sachs, have suggested this places the country at far greater risk of being hit by US tariffs. Such concern may explain the less optimistic response on how 2025 could play out from one of the region's key airfreight carriers. Speaking to ACN, a spokesperson for Singapore Airlines (SIA) says that the carrier would "maintain a cautious outlook for our cargo business as the demand for airfreight begins to plateau going into 2025 against a backdrop of macroeconomic uncertainty and geopolitical tensions". Echoing words tossed around by others, there was a sense that the situation was far more "fluid" than perhaps the rhetoric surrounding the forecasts for the region's next 12 months made apparent. The spokesperson adds, "export conditions in Southeast Asian countries, particularly Indonesia and Vietnam, remain fluid". And, of course, some of the bump the region's airlines experienced in their cargo holds came on the back of the chaos in the Red Sea, with security concerns generated by the attacks on commercial shipping, pushing many to air as they sought to avoid the lengthy transit times of containerised goods going around the Cape of Good Hope. There are questions marks how much longer the boost will last, with the Houthi militia responsible for the attacks having said that they intend to deescalate the situation. Even so, the SIA spokesperson said that there were areas where they retained confidence. They add that "we will focus on our key verticals and e-commerce to drive cargo performance, while continuing to monitor key trade lanes and adjust capacity to meet demand", having last year recorded a near double-digit percentage increase in e-commerce volumes on the year prior. Great growth ahead While Indonesia looks set to be the big winner from upward trends in e-commerce demand, the whole region is forecast to experience year-on-year growth right through to the end of the decade. This, of course, will necessitate demand for capacity, with carriers like SIA and Vietnam's own Vietnam Airlines lining themselves up to cater to such demand. And in August last year, SIA announced substantial adjustments for its 2025 network, with new flights across Europe, including more into London Gatwick, coinciding with news that it had lined up WFS to handle additional cargo volumes coming in the bellyhold of these services. The carrier's homebase, Singapore Changi Airport, also starts the year on the back of a strong 2024. Freight movements at the gateway leapt 14.6% up on 2023, falling just shy of hitting the 2m tonnes mark, with the final quarter providing a little over 25% of this. The gateway said that contributing to this growth had been "major improvements" in the flows between not only Singapore and China but Singapore and the US, while together with the ever-present e-commerce, the recovery of the country's electronics sector also played its part. The SIA spokesperson tells ACN that the carrier would be working closely with its "aviation ecosystem partners to optimise operational efficiencies within Singapore's air cargo hub". Alongside its flag carrier, Changi also looks set for increased volumes with full-freighter flights having been launched into the Singaporean gateway by both Shandong Airlines and Air Incheon. And, while stopping short of the optimism and "year of growth" expected on the passenger side, the gateway's chief executive officer Yam Kum Weng says that on the back of 2024's "strong growth" in cargo, the addition of "a bumper crop of 11 new city links, strengthening the air hub's network and opening up a world of new destinations" looked set to "support business ties". Elsewhere, Malaysia's MASkargo enters the new year on the back of a big win, having struck up an MoU with Qatar Airways Cargo, through which it hopes will broaden its access - via Qatar's network - to European markets, enabling further exports of Malaysian products. And there have already been some benefits from the MoU, with some 2,400 tonnes of freight having been flown in the first few weeks of the agreement having been struck. Plus, it seems that partnerships form the bedrock of an effort by the cargo division of Malaysia Airlines to tap into the growing potential for airfreight capacity in the region. Towards the end of last summer, a tender notice issued by Malaysia Aviation Group (MAG) indicated that the carrier was on the hunt for a Boeing 737-800 freighter operator that MASkargo could partner with to expand its regional Asia operations. The carrier's chief executive, Mark Jason Thomas, confirms to ACN before this document was discovered that, while long term it may look to acquire new freighters, the short-term goal was the pursuit of short- and medium-term partnerships, particularly to operate narrowbody services to regional destinations as it utilised its own freighter fleet for long-haul services. Internationals wade in Seeking to tap into Southeast Asia's potential airfreight growth opportunities, the regional carriers are not alone. Both China Cargo Airlines and Emirates SkyCargo have recognised the gains that could be made. Tapping into that, China Cargo Airlines has tapped up Tam Group to act as its general sales and service agent for the Philippines. Making use of its Airbus A320s, the Chinese carrier flies thrice weekly from Cebu to Shanghai, while also flying five times a week from Manila into Shanghai. He adds: "This appointment not only enhances our regional footprint but also enables us to deliver improved services and support for their operations. At Tam Group, we have implemented various solutions, including a robust CRM system and 24/7 customer service, to ensure a seamless experience for our clients. "We are continuously seeking enhancements to our offerings and look forward to collaborating closely with China Cargo Airlines to unlock their full potential in the Philippine market." Questioned on the state of the Dubai-based carrier's freight operations in Southeast Asia, Emirates SkyCargo's vice president of cargo commercial for the Far East and Australasia Abdulla Alkhallafi says that it is a region that "continues to perform positively for us". As to be expected, Alkhallafi tells ACN that the carrier was witnessing demand spikes being driven by increased manufacturing in the region, together with the "notable growth in e-commerce volumes" before adding that he and the team would be continuing to "explore opportunities to enhance our freighter capacity in these markets to cater to market demand in addition to existing belly capacity". However, much like SIA, it seems that Emirates is aware of the broader geopolitical context in which the growth in airfreight opportunities are arising. Like SIA's spokesperson, Alkhallafi cautions the need for vigilance. He tells ACN: "Logistics does not exist in isolation, of course, and so there is some expected uncertainty around future demand, due to geopolitical and economic reasons. However, we remain confident in Emirates SkyCargo's role in supporting businesses across Southeast Asia to connect with their customers and suppliers worldwide."

Source: aircargonews.net

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CMA CGM ramps up online presence with portal partnerships

CMA CGM Air Cargo has ramped up its online presence by rolling out capacity across three third-party booking portals: CargoAi, cargo.one and WebCargo. The move will help expand the French freighter operator's customer base as users of the three platforms will now be able to book space on its aircraft. CargoAi claims to have 17,000 freight forwarder users across 130 countries, cargo.one claims 25,000 forwarders in 134 countries and WebCargo claims 10,000 freight forwarding offices. The availability of capacity varies between each of the three platforms. CargoAi said it would integrate CMA CGM Air Cargo's "extensive network across their network". Meanwhile, freight forwarders using cargo.one in the US, Germany, France, The Netherlands, Belgium and Italy, can now book capacity for general cargo and perishable shipments to destinations including Shanghai, Hong Kong, Incheon, Guangzhou and Chicago. Capacity options are available up to 5,000kg with CMA CGM standard service, and with express service on applicable routes. "In time, more available markets are planned to be added," cargo.one said in a press release. WebCargo said its users would be able to see real-time rates and book cargo on key trade lanes connecting the US, France, Italy, Spain and Asia. Matt Petot, chief executive of CargoAi, said: "We are delighted to collaborate with CMA CGM AIR CARGO, a prominent leader in the air cargo industry. This partnership highlights our dedication to providing best-in-class digital solutions that optimize operations and drive efficiency in the air cargo sector." Moritz Claussen, founder and co-chief executive of cargo.one, said: "The addition of CMA CGM Air Cargo capacity to our portfolio reflects the unique depth and diversity of our carrier options. "We are delighted to add our expertise to CMA CGM AIR CARGO's digital strategy and bring its compelling services within the quickest, most convenient reach of many more forwarders." Cargo.one said the Paris-Charles de Gaulles-based airline offers services from across Europe to hubs in Asia Pacific and transpacific routes connecting Greater China and North America. It also has a road feeder network linking its Paris hub with Milan-Malpensa, Amsterdam, Liege, Munich and Frankfurt. And Wayne Tyndall, vice president commercial - freight forwarders and Airlines at WebCargo parent Freightos, said: "Adding CMA CGM Air Cargo capacity to WebCargo and 7LFreight makes it easy for forwarders to eBook shipments on key trade lanes, helping the industry adjust quickly to changing market conditions." The airline currently operates four freighters; three Boeing 777Fs and a single Airbus A330F. In the short term, two more 777Fs are expected to be delivered to the airline.

Source: aircargonews.net

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US warehouse space will be at a premium this year, cargo owners warned - The Loadstar

Prologis ended 2024 on a high note. The commercial real estate behemoth leased 61m sq ft of warehouse space in the fourth quarter, setting a new company record, and with a large chunk of the business signed in December. The company's report on last year's market shows a reversal from the highs of the preceding years. Global logistics rents sank 5%, with a 7% drop in the US and Canada, while rents retreated 1% in Europe. The report's authors describe it as a market correction, after years of exceptional growth, noting that rates remained markedly elevated over those in 2019. They were up 59% in the US and 33% in Europe. The impact was aggravated by new warehouse supply coming into the market in 2023 and 2024, reversing the momentum in vacancy rates. Naturally, the slowdown varied from region to region: Mexico and Brazil were two areas that recorded increases in rents, Prologis noted. In the US, there has also been a marked difference between warehouses located near international gateways that typically hold inventory for a while, such as the Inland Empire in the Los Angeles area, or Savannah and downstream facilities - distribution and fulfilment centres closer to consumer markets, with faster growth in the latter segment. Moreover, these facilities typically showed contraction in inventory levels, indicating rapid outflow, whereas inventory rose at upstream warehouses. One likely reason for this is front-loading, which got its initial push from worries about a port shutdown along the eastern seaboard, and latterly fears of US tariffs on imports, notably from China. In terms of verticals and commodities, the growth in e-commerce has been the most potent driver of demand for warehousing capacity. Amazon alone accounted for $2bn out of $9bn in warehousing projects under way in the US in December, led by a $500m facility taking shape in Niagara. This was topped by a $640m undertaking by retailer Macy's, which is building a 1.4m sq ft fulfilment centre in North Carolina. Retailers and wholesalers raised their share of the US warehousing investment market last year from 30% in 2023 to 38%. The industrial sector is showing signs of better days, although this did not manifest itself in numbers until the new year, when the purchasing managers' index in manufacturing broke into expansion after 25 out of 26 months of contraction. Front-loading had an impact on the need for warehouse capacity, and a further impulse stems from moves by Chinese e-commerce firms Temu and Shein to establish distribution footprints in the US, a trend likely to gather momentum this year as the US authorities are taking steps to stem the flow of e-commerce parcels pouring into the country. Over the past year, Temu has been adding US warehousing for products shipped domestically to offer narrower delivery windows, using capacity owned by WINIT and Easy Export, feeding them with inventory of popular items. And Shein has been using the same strategy for its QuickShip service to US consumers from facilities in North America. Both Prologis and real estate giant CBRE have predicted a moderate recovery in warehousing demand this year, fuelled by consumer spend, moderate inflation, and productivity gains. They do not expect rents to rise until the latter half of the year. The tightening of available capacity should be reinforced by the slower pace of new warehouse space entering the market. After pronounced increases in 2022 and 2023, construction starts fell by 30% last year Tariffs could add further impetus to warehousing demand. Seko Logistics warned cargo owners to secure sufficient capacity. "US warehouse space will become a premium - don't wait until space is gone or disruptions escalate even further to secure what is necessary for your business needs," it advised.

Source: theloadstar.com

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