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Asian airfreight providers can look forward to a promising end of year as optimism for 2019 remains high even with rising protectionism, according to Logistics Trends & Insights LLC (LogisTIcs), provider of customized logistics research and consulting services

In an analysis, LogisTIcs noted that the airfreight market from Asia has “cooled a bit.” September international air cargo demand increased 4.4% year-on-year, as compared to an 11.7% year-on-year increase in September 2017, based on data from IATA. For the first nine months of this year, airfreight is up 4.7%. For the first nine months of 2017, airfreight was up 10.7%.

Despite the slowdown, Asian airlines continue to expand, said Logistics Trends. Although reporting a decline in September cargo, Singapore Airlines announced plans to begin flights to Seattle beginning in September 2019, bringing the total number of U.S. destinations in its network to five.

In addition, Singapore Airlines recently introduced its Thrucool service, which is focused on the transport of time-sensitive and temperature-controlled pharmaceutical and healthcare shipments.

Meanwhile EVA Air reported a slight dip in September traffic, down 0.3%. Despite the dip in volumes, the company’s expansion plans involve putting its first Boeing Dreamliner into service this month, deploying it on the Taipei-Hong Kong route. A second Dreamliner is expected in December with plans to extend services to Osaka and Tokyo. Two more Boeing 787-9s are expected in 2019 with plans to use them on Australia and Europe lanes.

LogisTIcs said the outlook for the rest of the year looks very promising for Asian airlines. Cathay Pacific, which reported a 1.7% year-on-year increase in cargo and mail volumes for September, noted that October exports from China looked strong following the lull of the Golden Week Holiday period.

Logistics Trends also pointed to reports that forwarders were already seeing limited capacity between Asia and the U.S. even amid increasing rates.  During last year’s capacity constraints, several forwarders including Flexport, Panalpina and DHL opted to charter flights this year to ensure customers have access to adequate capacity between Asia and the U.S. and Europe. However, even their charter flights may not be enough this year, said the report.

November 11 is Alibaba’s Singles Day and with a focus on international markets, forwarders and carriers alike are expecting higher demand that will likely last through the end of November. On January 1, U.S. trade tariffs on China increase to 25%. A rush will be on for U.S. shippers to import goods prior to January 1 to avoid the increased taxes.

“A promising end of year is expected for Asian airfreight providers as optimism for 2019 remains strong despite increasing protectionism and U.S. shippers’ lack of immediacy to move Asian supply chains back to the U.S.,” concluded LogisTIcs.

Photo: Wpcpey

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