David Lara, Vice President of Global Airfreight Procurement at CEVA Logistics, is not usually downbeat.
But when asked if he
sees anything on Asia-Europe and Transpacific air freight lanes to inspire hope, unsurprisingly, he
found it hard to pinpoint positives given current global economic uncertainty.
"There is little optimism in the industry until possibly Q4, and we'll see how the global markets are by then," he
said continuing doubt over European demand and the future of the Euro was hitting import markets there, although U.S. demand was "expected to be marginally stronger."
"Some of the hi-tech companies will likely be launching new products for the Christmas period, but these are expected to be limited," he
The poor demand outlook on major lanes and bearish rates will leave airlines with few supply-side options, according to Lara
"Carriers will not continue to trade in reducing rates as they fight for profitability and will look to take capacity out to force rates up," he
did predict that airlines would turn to niche markets to drive revenues, however.
"Throughout 2012 the industry expects carriers may try to launch various new products in the high-tech sector and most will be from Asia with a global distribution requirement.
"Many carriers continue to focus on providing high yield products for the pharma and health care sectors and this will continue to grow."
As a 3PL, CEVA
provides a full range of global air services including expedite, consolidation, charter, hand carry/obc and sea-air.
"We work with all of the global carriers," said Lara
"However, we have strategic partnerships with select carriers to meet our customers' service requirements while delivering cost effective and service solutions."
Although the airfreight industry had been operating in a challenging environment, CEVA
had been able to "perform consistently well in terms of tonnage split" due to the strength of its global network and multi-service offering.
Unlike some of his
peers who have complained that sea-air shipments have been affected by high fuel surcharges because shippers have had to double pay, Lara
was seeing stable dual mode movements but had detected some traces of overall modal shift.
"In terms of dual mode competitiveness, it really depends on the needs of the customer at the point in time," he
"From the general market perspective, we have seen more freight moved from air to sea as the financial costs of inventory associated with sea are lower."
expects some persistent trends of the last few years to accelerate.
This will mean continued "low percentage" export growth from Europe to Asia from "the usual vertical industries-hi-tech, pharma, healthcare, automotive" and more demand for exports out of China from interior regions.
"Manufacturing will migrate from east to west China as manufacturers look at lower production costs in the west," he