DB Schenker has launched Direct Express – Australia – a new weekly scheduled air cargo service from Chicago to Sydney, Australia.
The service offers direct 777-300 freighter service to Sydney, every Monday departing from Chicago.
With a payload over 102 metric tons, the 777-F provides more capacity than any other twin-engine freighter as well as being one of the most energy-efficient and environmentally-friendly aircraft effectively reducing carbon emissions as compared to most other aircraft currently in service.
Additional service features include:
- A 22:45 departure resulting in a late cut-off for shipment drop-offs
- With a 12:05 Wednesday arrival in Sydney, shipments are Customs cleared with same-day connections for next-day delivery to most major markets in Australia
- Cold chain storage operations in both Chicago, IL and Sydney, Australia
- With the ability for block space agreements, shippers can get guaranteed lift during heavy or peak periods of the year
- Shipments remain under DB Schenker’s single-source control
- DB Schenker’s eSchenker web portal offers shippers 100 percent shipment visibility from pickup to delivery
- A wide range of shipping solutions for heavy and outsized products
The International Air Transport Association (IATA) has released full-year 2018 data for global air freight markets showing that demand, measured in freight tonne kilometres (FTK) grew by 3.5% compared to 2017. This was significantly lower than the extraordinary 9.7% growth recorded in 2017.
Freight capacity, measured in available freight tonne kilometres (AFTK), rose by 5.4% in 2018, outpacing annual growth in demand. This exerted downward pressure on the load factor but yields proved resilient.
Air cargo’s performance in 2018 was sealed by a softening in demand in December. Year-on-year, December demand decreased by 0.5%. This was the worst performance since March 2016. Freight capacity, however, grew by 3.8%. This was the tenth month in a row that year-on-year capacity growth outstripped demand growth.
International e-commerce grew in 2018, which was a positive factor for the year. Yet, there was a softening of several key demand drivers:
- The restocking cycle, during which businesses rapidly built up inventories to meet demand, ended in early 2018.
- Global economic activity weakened.
- The export order books of all major exporting nations, with the exception of the US, contracted in the second half of 2018.
- Consumer confidence weakened compared to very high levels at the beginning of 2018.
“Air cargo demand lost momentum towards the end of 2018 in the face of weakening global trade, sagging consumer confidence and geopolitical headwinds,” said IATA’s director general and CEO Alexandre de Juniac. “Still, demand grew by 3.5% compared to 2017. We are cautiously optimistic that demand will grow in the region of 3.7% in 2019. But with the persistence of trade tensions and protectionist actions by some governments there is significant downside risk. Keeping borders open to people and to trade is critical.
“To attract demand in new market segments, the air cargo industry must improve its value proposition. Enabling modern processes with digitalization will help build a stronger foothold in e-commerce and the transport of time- and temperature-sensitive goods such as pharmaceuticals and perishables,” Mr de Juniac said.
Airlines in all regions with the exception of Africa reported an annual increase in demand in 2018.
Asia-Pacific carriers posted the weakest growth of any region in December 2018 with a decrease in demand of 4.5% compared to the same period a year earlier. Capacity increased by 2.6%. The weaker performance in December contributed to growth in freight demand of only 1.7% in 2018 compared to 2017. Annual capacity increased 5.0%. The weaker performance of Asia-Pacific carriers in 2018 largely reflects a slowing in demand for exports from the region’s major exporters (China, Japan and Korea). Signs of a moderation in economic activity in China and an escalation of trade tensions continue to pose a downside risk to air cargo in Asia-Pacific.
North American airlines posted the fastest growth of any region for the seventh consecutive month in December 2018 with an increase in demand of 2.9% compared to the same period a year earlier. Capacity increased by 4.5%. This contributed to an annual growth in demand in 2018 of 6.8%, matching the rate of capacity increase. The strength of the US economy and consumer spending have helped support the demand for air cargo over the past year, benefiting US carriers.
European airlines posted a 1.9% year-on-year increase in freight demand in December 2018 and a capacity rise of 3.7%. The improved performance in December contributed to an annual growth in demand for air cargo of 3.2% in 2018. Capacity increased by 4.3% in the same year. Weaker manufacturing conditions for exporters, particularly in Germany, one of Europe’s key export markets, along with mixed economic indicators impacted demand in 2018.
Middle Eastern carriers’ freight volumes increased 0.1% year-on-year in December and capacity increased 4.5%. This contributed to an annual increase in demand of 3.9% in 2018 – the third fastest growth rate of all the regions. Annual capacity increased 6.2%. The region continues to be affected by geopolitical issues.
Latin American airlines experienced a decrease in year-on-year demand of 0.1% in December after three months of positive growth. Capacity increased by 6.0%. Despite a decrease in demand, it’s worth noting that the within South America market continues to perform strongly, with international demand up almost 20% year-on-year. Annual growth in freight demand among Latin America carriers in 2018 increased by 5.8% – the second fastest of all regions. Annual capacity increased 3.4% in 2018.
African carriers’ saw freight demand decrease by 2.2%, in December 2018, compared to the same month in 2017. This was significantly less than the 9.4% decrease the previous month. Capacity increased by 4.9% year-on-year. It’s worth noting that seasonally-adjusted international freight volumes, despite being 7.7% lower than their peak in mid-2017, are still 50% higher than their most recent trough in late-2015. Annual growth in freight demand among Africa carriers in 2018 decreased by 1.3% and capacity grew by 1%.
The International Air Transport Association (IATA) has released data for global air freight markets showing that demand, measured in freight tonne kilometres (FTK), rose 3.1% in October 2018, compared to the same period the year before. This pace of growth was up from a 29-month low of 2.5% in September.
Freight capacity, measured in available freight tonne kilometres (AFTK), rose by 5.4% year-on-year in October 2018. This was the eighth month in a row that capacity growth outstripped demand.
Growing international e-commerce and an upturn in the global investment cycle are supporting the growth. However, demand continues to be negatively impacted by:
- A contraction in export order books in all major exporting nations in October.
- Longer supplier delivery times in Asia and Europe.
- Weakened consumer confidence compared to very high levels at the beginning of 2018.
“Cargo is a tough business, but we can be cautiously optimistic as we approach the end of 2018. Slow but steady growth continues despite trade tensions. The growth of e-commerce is more than making up for sluggishness in more traditional markets. And yields are strengthening in the traditionally busy fourth quarter. We must be conscious of the economic headwinds, but the industry looks set to bring the year to a close on a positive note,” said Alexandre de Juniac, IATA’s Director General and CEO.
All regions reported year-on-year demand growth in October 2018, except Africa, which contracted.
- Asia-Pacific airlines saw demand for air freight grow by 1.9% in October 2018, compared to the same period last year. This pace of growth was relatively unchanged from the previous month. Weaker manufacturing conditions for exporters, and longer supplier delivery times particularly in China and Korea impacted the demand. As the largest freight-flying region, carrying more than one-third of the total, the risks from rising trade tensions are disproportionately high. Capacity increased by 4.2%.
- North American airlines posted the fastest growth of any region in October 2018, with an increase in demand of 6.6% compared to the same period a year earlier. Capacity increased by 8.2% over the same period. The strength of the US economy and consumer spending have helped support the demand for air cargo over the past year, benefiting US carriers.
- European airlines experienced a 1.4% increase in freight demand in October 2018 compared to the same period a year earlier. Capacity increased by 1.9% year-on-year. Weaker manufacturing conditions for exporters, and longer supplier delivery times particularly in Germany, Europe’s largest freight flying country, impacted demand. Seasonally-adjusted international air cargo demand remained deflated in October, which could indicate the start of a broader weakening in demand.
- Middle Eastern airlines’ freight volumes expanded 5.0% in October 2018 compared to the same period a year earlier. Capacity increased by 8.8% over the same period. There are signs of a pick-up in seasonally-adjusted international air cargo demand helped by more trade to/from Europe and Asia.
- Latin American airlines’ freight demand rose 0.3% in October 2018 compared to the same period last year and capacity increased by 3.3%. International demand slipped by 0.9%, marking the first contraction in 11months. International freight volumes have fallen month-on-month in four of the past five months, reflecting broad weakness in the region’s key markets.
- African carriers saw freight demand decrease by 4.2% in October 2018, compared to the same month last year. This was the seventh time in eight months that demand shrank. Capacity increased by 5.4% year-on-year. Demand conditions on all key markets to and from Africa remain weak. Nonetheless, seasonally-adjusted international freight volumes have stopped declining and recovered sharply in recent months.
The International Air Transport Association (IATA) released data for global air freight markets showing that demand, measured in freight tonne kilometres (FTK), rose 1.7% in March 2018, compared to the same period the year before. This was five percentage points lower than the February result and the slowest pace of growth in 22 months.
The year-on-year increase in capacity, measured in available freight tonne kilometres (AFTK) fell to 4.4% compared to 6.3% in February. This was the first time in 20 months, however, that annual capacity rose faster than demand.
The sharp growth slowdown is principally due to the end of the restocking cycle, during which businesses rapidly increased their inventory to meet unexpectedly high demand. A softening of global trade is also evident.
“It’s normal that growth slows at the end of a restocking cycle. That clearly has happened. Looking ahead we remain optimistic that air cargo demand will grow by 4-5% this year. But there are obviously some headwinds. Oil prices have risen strongly, and economic growth is patchy. The biggest damage could be political. The implementation of protectionist measures would be an own-goal for all involved—especially the US and China,” said Alexandre de Juniac, IATA’s Director General and CEO.
All regions except Latin America reported year-on-year declines in growth in March, with Africa in negative territory.
African FTK fell by 3.4% in March. This result may, however, be influenced by the comparison with unusually strong growth in March 2017. Indeed, Africa has reported the fastest growth of all regions for 17 of the last 18 months, so it would be premature to suggest this is the start of a negative trend.
Asia-Pacific carriers reported FTK growth of just 0.7% compared to the same period a year ago. Export orders in Japan and Korea have fallen in recent months and the region remains particularly exposed to the impact of protectionist measures.
European airlines’ FTK rose 1.0% in March compared to March 2017. A stronger Euro and a softening of export orders in Germany partially explain the result, but the seasonally-adjusted trend in FTK has been slowing in recent months.
Latin American airlines posted growth of 15.5% in March compared to a year ago, the only region to improve on its performance compared to February 2018. Freight volumes in the region have been recovering over the past 18 months, in part due to the better performance of the Brazilian economy.
Middle East carriers saw growth of 0.8% in March compared to March 2017. This is consistent with the general weakening in regional performance over recent months, and in particular may reflect an especially strong March 2017 result.
North American carriers’ freight volumes expanded 3.9% compared to March 2017. The US inventory-to-sales ratio has risen in 2018, indicating the boost to cargo growth from restocking is over.
You can view March air freight results (pdf) here.
The International Air Transport Association (IATA) has released data for global air freight markets showing that demand, measured in freight tonne kilometres (FTK), rose 5.9% in October 2017 compared to the year-earlier period. This was a slowdown from the 9.2% annual growth recorded in September 2017 but still exceeded the average annual growth rate of 3.2% over the past decade.
Freight capacity, measured in available freight tonne kilometres (AFTK), rose by 3.7% year-on-year in October. This was the 15th consecutive month in which demand growth outstripped capacity growth, which is positive for load factors, yields, and financial performance.
While cargo demand remains strong, several indicators show that we may have passed the growth peak. The inventory-to-sales ratio in the US is tracking sideways, indicating that the period when companies look to restock inventories quickly — which often gives air cargo a boost — has ended. The new export orders component of the global Purchasing Managers’ Index (PMI) is stable. And the upward trend in seasonally-adjusted freight volumes has moderated.
Freight volumes are still expected to grow in 2018, although at a slower pace than in 2017.
“Demand for air freight grew by 5.9% in October. And tightening supply conditions in the fourth quarter should see the air cargo industry deliver its strongest operational and financial performance since the post-global financial crisis rebound in 2010,” said Alexandre de Juniac, IATA’s director general and CEO.
Airlines in all regions reported an increase in total year-on-year demand in October. However, in contrast, international freight growth slowed in all regions except Africa.
Asia-Pacific airlines saw freight volumes increase by 4.4% and capacity expanded by 3.9% in October 2017, compared to the same period last year. Demand for freight is now around 3% higher than the peak reached in the post-financial crisis rebound in 2010. The region’s manufacturers continue to enjoy buoyant order books. And the major exporters in China and Japan are reporting growing backlogs supported in part by stronger economic activity in Europe.
North American carriers posted an increase in freight volumes of 6.6% for October. This was a slowdown from the 7.4% recorded in September but still ahead of the five-year average pace of growth. Capacity increased 3.8%. The strength of the US economy and the US dollar has boosted the inbound freight market in recent years. Data from the US Census Bureau shows an 11.6% year-on-year increase in air imports to the US in the first nine months of 2017, compared to a slower rise in export orders of 6.5%.
European airlines posted a 6.4% increase in freight demand in October 2017. This was a marked slowdown from the 10.6% growth in demand in September, however it was still above the five year average of 4.9%. Capacity increased 2.5%. Concerns that the recent strengthening of the euro might have affected the region’s exporters have not materialized yet. Europe’s manufacturers’ export orders are growing at their fastest pace in more than seven years. Freight demand remains very healthy on transatlantic routes and is strong on routes to and from Asia – having received a boost in trade from the economic stimulus measures put in place by China.
Middle Eastern carriers’ year-on-year freight volumes increased 4.6% in October and capacity increased 3.4%. During the same period international freight volumes slowed to 4.7% from 9.2% the previous month. The recent volatility produced by the region in the year-on-year growth rate for international freight volumes is due to developments in demand in 2016 rather than a marked change in the current traffic trend. In fact, seasonally-adjusted international freight volumes have continued to trend upwards at a rate of 8-10% over the past six months.
Latin American airlines experienced a growth in demand of 7.2% in October and a capacity increase of 4.4% compared to the same period in 2016. International freight volumes rose by 7.7% over the same period. This is nearly nine times the five-year average rate of 0.9%. The pick-up in demand reflects signs of recovery in the region’s largest economy, Brazil. Seasonally-adjusted international freight volumes are now back to the levels seen at the end of 2014.
African carriers posted the largest year-on-year increase in demand of all regions in October, with freight volumes rising 30.3%. Capacity increased 9.2%. During the same period international freight volumes grew by 28.5%. This is more than three times the five-year average growth pace of 9.4%. Demand has been boosted by very strong growth on the trade lane to and from Asia, which increased by more than 67% in the first nine months of the year.
Freight forwarder VISA Global Logistics (VGL) has entered an agency agreement with international transport and logistics company, Gebrüder Weiss (GW), to become its exclusive agent in Australia and New Zealand.
In addition to its core business of land transport, air and sea freight logistics, GW operates several highly specialised industry solutions and subsidiaries under the umbrella of Gebrüder Weiss Holding AG, based in Lauterach. Austria.
VGL’s global reach has now further extended to cover GW’s worldwide network in over 150 locations, including: Canada, USA, Japan, Georgia, Kazakhstan, Taiwan, Turkmenistan, United Arab Emirates, Austria, Bosnia and Herzegovina, Bulgaria, Croatia, Czech Republic, Hungary, Macedonia, Montenegro, Romania, Russia, Serbia, Slovakia, Slovenia, Switzerland, Turkey and Ukraine.
Air freight expectations have taken the Ti Logistics Confidence Index higher in June, but growth has been tempered by results in sea freight.
According to World ACD’s latest note, growing cross-border e-commerce demand is one reason why air freight growth is on the up, though interestingly, it appears not have stimulated large increases in express air cargo. It is suggested that this is because most e-commerce finds the regular speed of air cargo sufficient, and e-commerce is not just a matter of flying small individual parcels across the world. In addition, increasing consumer demand in general (electronics in particular) may be another factor, driven by higher purchasing power, especially in Asian markets.
Though IATA statistics trail the current situation by two months, they nevertheless offer a window into the confidence of the air freight industry; April results from the organisation showed yields up by 4.5% year-on-year, whilst FTK rose by 10.5%.
The Sea Freight Index demonstrated a far more mixed picture. In this instance, the present conditions declined, offsetting a slight improvement in expectations.
Vessel space appears to be in much shorter supply than in previous years, following aggressive capacity reduction strategies from the major carriers. Following the Europe-Asia capacity crunch in April, shippers will inevitably be nervous, though at least port congestion problems in China now appear to have been resolved.
The Air Freight Index registered a month-on-month rise of 3.1 points to 56.9 for June 2017. Whilst this score reflected a year-on-year improvement of 6.5 points, it stood 2.7 points below the June 2015 total.
The Air Freight Logistics Situation Index noted a month-on-month improvement of 1.5 points to 55.0. This growth was mainly led by the US to Europe lane, which rose by 3.1 points to 51.3. Nonetheless, both the Asia to Europe (up 1.6 points to 59.0) and Europe to US (up 1.4 points to 51.1) lanes grew enough to offset the Europe to Asia lane, which declined 0.3 points to 56.9.
The performance of the Air Freight Logistics Expectations Index can perhaps be described as a June boom. Increases across the board were underlined by particularly strong performance on the Europe to Asia lane, which rose 7.3 points to 59.8. The US to Europe lane saw the second-strongest growth, with an improvement of 5.2 points taking it up to 52.2. A gain of 3.4 in the Asia to Europe lane brought that up to 70.1, whilst a 2.7 point rise in the Europe to US lane resulted in a total of 50.4, ensuring all lanes finished above the 50-point mark for the month.
The Sea Freight Logistics Confidence Index recorded an overall score of 54.9, having decreased by 0.6 points against the previous month’s score. The result was 7.3 points greater than the score registered in June 2016, and 0.8 points greater than that recorded in June 2015.
Standing at 51.8, the Sea Freight Logistics Situation Index declined by 1.7 points against the previous month. This result occurred following declines in three of the four individual lanes, with only the Asia to Europe lane, at 61.8 points, recording an increase (up 1.6 points). US to Europe remained the weakest-performing of the lanes, losing 1.9 points to total 37.8 for June. The Europe to Asia lane recorded a monthly total of 53.7, having declined by 2.8 points, whilst the Europe to US fell further, down 4.3 points to 50.4.
The Sea Freight Logistics Expectations Index totalled 58.0 points, having risen by 0.6 against the May result. This outcome was chiefly driven by the Europe to Asia lane, which increased 2.2 points to 55.8. In addition, the Europe to US lane gained by 0.3 to total 54.1 points, whilst US to Europe increased by 0.1, amounting to 53.8. Together, these results more than offset the 0.5 point decline on the Asia to Europe lane, which nonetheless still recorded the highest figure of the four at 66.8.
Ground-handling company dnata Australia has invested $1.5 million to install five state-of-the-art x-ray machines in Sydney, Melbourne, Brisbane, and Adelaide, in keeping with the mandated Piece Level Screening requirements for cargo consignments to the United States.
The new infrastructure has been put in place at the airports dnata operates in ready for the 1 July deadline. Along with changes to cargo screening that have been imposed by the Office of Transport Security (OTS) in conjunction with the US Transport Security Administration (TSA), dnata has identified improvements in operating procedures and provided training for their staff to ensure compliance with the increased security measures.
All cargo that passes through dnata’s facilities across Australia travelling to the US – either on a direct flight or via another airport – will be subject to the screening requirements.
The changes in cargo screening will impact airline carriers and the extended freight forwarding community, and dnata has been “working closely with customers, government authorities and other cargo terminal operators to ensure that the processes that are being evaluated are not only the most safe in the industry but also efficient and supported by our customers,” the company said in a press release.