Some production-in the garment sector has begun to shift away

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fter the glitter of the Olympics, Beijing moved center stage forthe logistics sector, but chances of further world records aredecidedly slim.
With the sporting extravaganza out of the way, optimists hadpredicted a spike in air cargo demand as factories that had beenidle during the athletics event ramped up production to make up forlost business. Indeed, output from the Chinese capital and adjacentareas was up in early September, but operators were unfazed."There's been a surge since the Olympics ended, but we should haveno problem handling it with the capacity that's available,"commented Giorgio Laccona, chief executive of forwarder IJS Global.
James Gagne, chief executive for Greater China at Agility, agreedthat the increase in demand should not cause any significantbacklogs. "Beijing is a passenger aircraft market," he added.
Indeed, Nippon Cargo Airlines suspended its Beijing freighter justbefore the Olympics and will not resume the service in theforeseeable future. "The market is not big enough to support a fullfreighter," remarked Shawn McWhorter, president for the Americas.
If the post-Olympics mini-peak proves a product of wishful thinkingin a troubled industry, what about the coming peak season fortraffic out of Asia? According to Gagne and Laccona, recent signalssuggest that demand is picking up already and building up for aspike in traffic later on. Ole Ringheim, senior vice president,airfreight for the Asia-Pacific region at DHL Global Forwarding, isbracing himself for a capacity crunch.
"Forecasts from several of our clients do suggest a relativelystrong period for movement of air freight, and we take this as apositive signal for the remainder of the year," he said.
Singapore Airlines Cargo is planning to reinstate some flights thatwere suspended in response to weaker demand earlier on, but thefocus will be on the Asia-Europe sector. Traffic to Europe looksset to be stronger than across the Pacific, reflecting the weaknessof the U.S. economy, observed Tan Chong Beng, senior manager ofindustry affairs and mail.
There is a general consensus that the coming peak will arriverather late, probably by November, and will be less pronounced thanin past years. A major reason for this has been the build-up ofcapacity into China in recent years, which has outpaced marketgrowth. Moreover, some production-in the garment sector as well asin electronics-has begun to shift away from China to other parts ofAsia, notably Vietnam, Laccona pointed out.
While lift out of China has surged in recent years, freightercapacity in the Asia-Pacific region has dwindled lately as carrierscut back operations in response to soaring fuel costs. The comingpeak seems to be as much as result of rising demand as ofdiminished capacity.
DHL Global Forwarding estimates there is 10 percent less commercialcapacity available to North America and 5% to 6% less from Asia toEurope.
"We have sourced ten additional freighter rotations ex-China andexpanded our traditional Q4 contracts by approximately 15% to 19%through commercial arrangements with our core carrier programs,covering in particular Hong Kong, China, Taiwan, Vietnam and Korea,and to some degree also Singapore and Malaysia. Through ourin-house carrier, Starbroker, we have also lined up some additionalcapacity in our Miami and Brussels hubs to cover certain programsinto Latin America as well as Africa," Ringheim reported.
Singapore Airlines sees some room for charter activity, but othersare skeptical. Neither Agility nor IJS see much scope for charters,feeling they have sufficient scheduled capacity in hand. Accordingto McWhorter, relatively few charters have been lined up in HongKong so far.
"The cost of charters has been high. It was up to $600,000 out ofHong Kong a short while ago," Gagne remarked.
The wild card in the equation is uncertainty about last minutedemand. There has been speculation that importers may have been toocautious in their orders and will need to scramble to guaranteesufficient supplies at the last moment, prompting a spike in aircargo demand.
"We're hearing this, but it's difficult to assess. This one remainsto be seen," Gagne said.
& Briefly
Freight traffic for Asia-Pacific carriers fell 5.5%, the largestdecline in four years, according to the Association of Asia-Pacific Airlines . Airlines cut freight capacity back 5.9%, the fourth straightmonthly decline. & Singapore Airport Terminal Services acquired Country Foods, a ready-to-eat meals company, from threeminority shareholders for $3.7 million. & Cathay Pacific freight traffic expanded 2.2% in July, slowing the growth fromearlier in the year and giving the airline 7.8% more freighttraffic in the first seven months of 2008. & Singapore-based Worldwide GSA became the general sales agent for AirBridgeCargo Airlines inTaiwan. & The International Air Transport Association 's e-freight is operational in South Korea, led by Korean Air Cargoand Asiana Cargo. & Forwarder SEKO opened an operation in Hong Kong. & Virgin Atlantic is increasing service between London Heathrow and Hong Kong totwice a day. & Kintetsu World Express signed a contract for its operations in 10 countries in Europe andSouth Africa to use OAG Cargo's Airfreight Rates application todistribute and search for real-time worldwide cargo rates. & Asia Airfreight Terminals , the No. 2 handler at the Hong Kong International Airport, saw itstonnage fall 5 percent in July, with imports down 8 percent.Tonnage in the first seven months of 2008 was up 3 percent over thesame period the year before. & Korean Air is buying a 777-300 extended range airliner for $257 million, fordelivery in July 2010. & Air China ordered 15 777-300 Extended Range and 30 737-800 aircraft. & Asiana Airlines placed an order for two 777 extended-range aircraft, valued at$438 million at list prices. ... Shanghai Airlines Cargo has made Airbridge International U.K. the cargo general sales andservices agent for it activities in the U.K. & DHL Express invested $210 million in expanding its Central Asia Hub in HongKong, which wrapped up renovations in September. & KUZU Airlines Cargo , based in Istanbul, acquired three Airbus A310 freighters fromEmirates SkyCargo, adding to its fleet of four A300-B4 vessels. Theairline will take possession of the aircraft by December. & IBS Software Services , an Indian provider of leading-edge I.T. solutions for thetransportation and logistics industry, is partnering with Cargo2000, an IATA industry initiative. The move enables IBS to ensurethat it is meeting the system and technology needs of its globalairline customers. & ST Aerospace delivered the 38th MD-11 Boeing Converted Freighter to UPSAirlines, completing a passenger-to-freighter conversion projectfor the U.S.-based parcel giant in roughly seven years. STAerospace has converted a total of 58 of the aircraft on behalf ofBoeing.