For marketing of your brand you can now send us a WhatsApp message directly, click here.

The union-employer dispute at U.S. West Coast ports, which left ships waiting in port and cargo and equipment stranded across the nation for much of the last year, finally ended in May when a new 5-year labor agreement was signed between the International Longshore and Warehouse Union (ILWU) and the Pacific Maritime Association (PMA).
The long-running saga offered a much-needed boost to global, and specifically transpacific, air cargo markets. But with West Coast port operations now returning to normal, will any of that modal shift be retained by the air cargo sector?
As a new report by analysts Drewry confirms, the U.S. port delays of the last year did indeed result in a tangible shift of cargo from ocean to air, reversing the long-term trend that has seen cargoes previously flown increasingly shipped by container shipping lines. Although the volume shift to the skies as a percentage of total trade was small, its value to the air cargo community was immense.
“The U.S. port delays were forcing a number of shippers to resort to paying for much more expensive air freight in order to replenish stocks in the run-in to Christmas,” said Drewry.
This saw Drewry’s East-West Air Freight Price Index, a weighted average of all-in air freight “buy rates” paid by forwarders to airlines for standard deferred airport-to-airport air freight services on 21 major East-West routes for cargoes above 1,000 kgs, soar to $3.92 per kg in November 2014.
However, said Drewry, despite the faster growth rate of air cargo volumes during the port labor impasse, air cargo only increased its share of the U.S. import containerizable trade to around 2.8 percent, up from 2.4 percent at the start of 2014.
“In normal circumstances there is very little overlap in the goods that ocean and air cargo move, but the small bubble they do fight over in the middle includes items and parts from the hi-tech, fashion, and automotive industries among a small select group that require expedited transportation,” said Drewry.
“U.S. Census Bureau data shows that air cargo has been increasing its market share in these areas.”
Census Bureau figures suggest that high-tech commodities registered the biggest modal shift over the last year, although other sectors were also boosted and some continue to benefit. “Fashionable clothing has been switching to air in recent months in readiness for the summer season,” said Drewry. “The need to get more mundane everyday clothing, such as men’s vests and T-shirts, is less pressing, but even here there has been a small move towards air cargo.”
But what next? Drewry takes the view that as port operations improve on the U.S. West Coast, the reversal in the long-term shift towards ocean will resume, resulting in air cargo again seeing its share of U.S. import trade fall.
Sou Ping Chee But there could be a short-term upside. “The prospects of missed sailings in the peak season as ocean carriers look to redress the supply-demand imbalance could potentially prolong the blip for a small number of high-value goods,” added the report.
A long-term reversal of the last year’s shift to air is also the industry consensus. “Now that the port situation in the U.S. has normalized, we have stopped seeing organized ocean to air freight conversion on the transpacific trade lane,” said Sou Ping Chee, (right) Regional Head of Airfreight Asia Pacific for Panalpina. “Under normal circumstances we do not expect to see massive ocean to air conversion in view of the usually slower demand during the summer months.” Paul Tsui, (left) the immediate past chairman of the Hong Kong Association of Freight Forwarding Agents and the Federation of Asia Pacific Aircargo Associations, said operations at the port of LA had now returned to normal and there were no longer delays. However, the overall market outlook across modes was currently weak on the Transpacific. “In fact, air freight has slowed for the last couple of weeks, but ocean freight is even worse,” he added. “But overall volumes should improve by the third week of August.”


Subscribe to the tablet/Smartphone edition here:
https://issuu.com/store/publishers/theclipper/subscribe

Subscribe to the Print edition here:
https://www.agropress.com/produkt/the-clipper-print-edition-subscription-2/

Book your advertisement in the Print Edition, the Podcast, the Smartphone Edition, our Youtube and Social Media Channels here:
https://www.agropress.com/shop/

Listen to the Podcast here:
https://anchor.fm/theclipper

See our Media Kit here:
http://theclippermag.com/wp-content/uploads/2020/04/AGROPRESS-CLIPPER-MEDIA-KIT-ENGLISH-2020.pdf