Chinese New Year tailwind lifting Asia air freight demand

Chinese New Year tailwind lifting Asia air freight demand

HONG KONG — Air freight on the Asia-North America trade is riding a tailwind that filled freighters and bellies in the last quarter of 2014, and after a brief holiday dip the volumes are again on the rise.

Shippers are trying to get their cargo out of China before a later Chinese New Year holiday closes factories on the mainland for up to three weeks, and the surge in volumes has begun.

“This year January started a bit slower than we had hoped after a good fourth quarter, however volumes are now starting to pick up as we move closer to the Chinese New Year (CNY) holiday,” said James Woodrow, Cathay Pacific director of cargo.

“We expect a busy 3 weeks ahead — the CNY break — and then another good March,” he told

Cathay Pacific reported a 12 percent year-over-year growth in tonnage carried, and demand remained robust right up until just before Christmas, particularly on trans-Pacific routes out of Hong Kong.

Woodrow said the carrier was hoping a range of factors improving the air freight environment, such as cheaper fuel, steady U.S. demand and continuing West Coast port congestion, would help strengthen both March figures and those of the second quarter.

Air cargo throughput at Hong Kong and Shanghai airports reached record levels in 2014, driven largely by healthy demand from the U.S. and Southeast Asia. Hong Kong International Airport handled 4.38 million tons of freight, a 6 percent rise on 2013, and expects air cargo to grow between 4-6 percent this year.

BB&T Capital Markets said in a note customers that the waterfront chaos that has congested the U.S. West Coast ports for the past few months was still providing a boost to air freight.

“We continue to hear of more shippers utilizing air freight as a way to mitigate some of the impact from the West Coast port disruptions,” the note stated.

“Last week, yoga wear retailer lululemon athletica inc. noted using an increased level of air freight as a result of the port issues. In addition, other retailers, including Ann Taylor, New York & Co., and Chico’s have also reported using a higher level of air freight to avoid supply-chain delays.”

Lower fuel costs have wide-ranging and positive effects on freighter operators. “We believe cheaper fuel costs is good news for air cargo, as lower oil prices help air freight become more competitive with ocean freight, as a lower fuel surcharge helps offset any base rate increases,” the BB&T note said.

In the past few years, air cargo operators have been frantically trying to off-load older and less fuel efficient freighters, such as Boeing 747Fs. However, BB&T said the low fuel prices were helping aircraft leasing companies place jets that were previously destined for the scrap heap.

The International Air Transport Association’s Airline Industry Forecast 2014-2018, released in October, paints a positive picture, predicting international air freight volumes will increase at a compound annual growth rate of 4.1 percent over the next five years.

More than $6.8 trillion worth of goods, equivalent to 35 percent of total world trade by value, moved by air in 2014, IATA Director General Tony Tyler noted.

Contact Greg Knowler at and follow him on Twitter: @greg_knowler.