[photopress:aircargo.jpg,full,alignright]First come complaints that there is an excess of capacity in the air cargo business.
Now comes the complaint that China is hogging all of the space.
In fact, it is possible for both complaints to exist side by side. The use of air cargo is not a smoothed out graph with easy predictions. There is a long gap between a need arising for cargo space and an aircraft becoming available to cater for it.
So, yes, there is a looming problem of excess air capacity. And, yes, there are temporary shortages. Almost simultaneously.
At a recent conference in Atlanta air cargo shippers complained, at some length, that there is no shortage of problems US companies face in out-sourcing manufacturing to Asia. For air cargo shippers, available lift out of Asia at peak season
— perhaps the phrase ‘peak season’ is key here
— was high on the complaint list.
Timex makes the majority of its watches in the Philippines
— 17 million. The company ships 97,000 watches a week to the US, either to Wal-Mart distribution centers or to the Timex facility in Little Rock, Arkansas.
Michael DeVault, Timex vice-president of distribution and logistics, said it was difficult to find lift out of Asia as China swallowed all available air cargo capacity. He said, ‘Our business is driven by retail cycles, so most of our shipping is done in the third and fourth quarter. That means we clash with all the peak season shipments absorbing capacity leaving China.’
Golden Gate Logistics senior vice-president Ed Feitzinger had similar complaints. He said, ‘Just look at Shanghai. Hewlett Packard started making all its laptops in Shanghai and now flies one-and-a-half 747 freighters out of Pudong every day.
‘Dell set up a factory in Shanghai. So did Seagate Technology [a major US maker of hard drives] and in a short time air freight tightened up and started to cost a lot more. And that situation remains.’
What, perhaps, they want is a very large amount of capacity for the American Christmas and Thanksgiving trade. Unfortunately, demand and supply in almost any business are rarely smoothly matched. The suggestion that Christmas and Thanksgiving, like Golden Weeks, should be abolished, is not met with enthusiasm.
Source: Cargonews Asia
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