Yes, Virginia, there will be a peak season for the airfreight industry this year -- but you may need a magnifying glass to see it. That was the general message from freight forwarders who spoke at the J.P. Morgan Logistics Conference in New York this month. 'There are little signs that it's starting to pick up,' said Peter Rose, chairman and chief executive of Expeditors International. UTi Worldwide's volume picked up in August, but that was partly because there were five Fridays last month but only four in August 2000, said Roger MacFarlane, UTi's chief executive. Friday is typically the busiest day of the week for air forwarders.
But with unemployment rising and consumer confidence weakening, it's unlikely that this year's peak will be remotely comparable to those of recent years. 'We have become in-creasingly concerned that the downturn in the technology sector and its impact on the airfreight sector is going to exceed that of past down cycles,' said Greg Burns, an analyst with J.P. Morgan.The downturn is creating opportunities for shippers to get bargain rates. Rose, however, warns that shippers and forwarders who make price the top consideration could lose out. In some cases, Expeditors rejects business when shippers ask them to match better offers from other forwarders. Rose said he tells such prospective customers, 'Go with them and when they go bankrupt, give us a call.'
While volume is starting to pick up after the summer doldrums, there won't be enough of a recovery to absorb all the excess capacity in the market. Nonetheless, some carriers are increasing freight rates. Northwest Airlines raised rates 15 0.000000rom all destinations in Asia except Japan and South Korea, effective Sept. 1. 'It's holding surprisingly well,' said Rich Sells, the carrier's vice president of cargo sales. 'I'd put it at an eight on a scale of one to 10.'
Other carriers lifting rates included Korean Air. Northwest immediately announced that it was matching Korean Air's increases, described by Sells as commodity specific and ranging from 10% to 12%.
On the trans-Atlantic, Air France is raising rates from Europe by 3% to 50n Oct. 1.
'Imports are still holding up,' said Anne-Marie Rosaler, the carrier's dir-ector of North American cargo sales. On the outbound side, however, 'Bus-iness is still terrible. We're all waiting for a peak season.'