Alibaba rewrites e-com playbook, while ZTO is sued over $1.4bn IPO
Two stories from the world of Chinese ecommerce today. First up, Alibaba is going into ...
The traditional end-of-year peak season for air cargo could disappear this year, according to Emirates SkyCargo vice-president Ravi Mirle.
Speaking on the sidelines of Air Cargo China in Shanghai yesterday, Mr Mirle told The Loadstar shippers were anticipating weak year-end volumes.
“One of the reasons I came here was to ask our customers where the growth is coming from this year, and I’m sorry to say I haven’t got any clear answers,” Mr Mirle said.
He added: “Nobody has a crystal ball, but what is for sure, if you have to summarise the discussions, is that customers are saying there may not be a big peak this year.
“There may be a peak, but it could be for a couple of weeks or shorter, or it might even be flat.”
Cargolux president and chief executive Dirk Reich was also downbeat on market performance so far in 2016.
“Nobody makes money in the first half, everybody is waiting for the last three months of the year. It’s a very, very challenging market at the moment but we hope with some capacity being reduced, and with the high season coming, we will see stabilisation by the end of the year.”
However, Mr Reich was more optimistic for China’s long-term prospects, adding: “China is the biggest air freight market worldwide, far bigger than the US and almost double the size of Germany.
“According to Boeing, China and intra-Asia will be the fastest-growing traffic lanes over the next 10 years, so even if the GDP growth rate declines, it will continue to be the fastest-growing market. We are very bullish about the market in China.”
Official data appears to support Mr Reich’s comments on the market. Although IATA showed a 3.2% increase for global air cargo markets in April, it cautioned that the comparative data had been skewed by the 2015 US west-coast port crises, during which air cargo received an unexpected boost.
For Emirates SkyCargo, the key to bucking market stagnation is a strong global network.
Mr Mirle said the airline had posted a 10% increase in cargo volumes last year by operating an expansive hub-and-spoke operation from Dubai.
“The strength of our network is absolutely a strong asset for us. We have 23 airports in Asia, 16 in the Middle East and 27 in Africa – and these are places where things are really happening.
“We don’t only go to the primary cities, but to the secondary and tertiary cities as well. It’s the reach we give, I think, that’s helping us generate the volumes,” he added.
Like other international airlines, Emirates is contemplating further expansion in China. The carrier recently announced the launch of a new service from Dubai to Yinchuan and Zhengzhou, two of the fastest-growing cities in midwest China. Around 60% of Emirates’ Chinese cargo is bound for the Middle East and Africa, according to Mr Mirle.
Asked whether traffic rights could determine who gains the upper hand in the battle for China’s booming air cargo market, Mr Mirle said air service agreements were country specific and that “traffic rights others get may not impinge upon us, and what happens to us may not have an impact on them.”