Here’s an industry newsletter and an analysis to see how it affects our air freight.
Many friends already know that Yantian Port and Nansha Port have been seriously congested recently.
According to Sohu.com: “On February 1 this year, Yantian International Container Terminal ushered in a milestone – the cumulative container throughput exceeded 200 million T. As the world’s largest single container terminal, it has continuously created industry records, with In 26.5 years, it created a new world port record of 200 million T (it is the single terminal that has set this record in the shortest time). If this 200 million T is connected end to end, it can circle the earth’s equator 30 times! And from 100 million to 200 million, and it took only 8 years for Yantian Port.”
(The above news is excerpted from: https://www.sohu.com/a/448844814_99935301 )
The situation of the port congestion caused many trailers to spend too much time on the road, and there was congestion. The Yantian port official also issued a statement on the situation of the port congestion, and the traffic police brigade also took corresponding measures.
At the same time, some containers were shipped from Nansha. However, Nansha has also closed its port recently due to the epidemic. This is how to do? The trailer is seriously stranded, and the container can only wait.
Many friends see such a situation and may say, will all the goods be transferred by air? Will air freight costs continue to rise?
I can only tell you that not all goods can be, or can be transferred by air. Air freight costs are already in a rising stage. Now the situation of sea traffic jams in ports will also lead to an increase in air freight costs, but it is not the main reason.
Let’s take an extreme example to see why not all goods can be transferred by air. If the customer has reached a trade agreement with the factory and is doing CIF, then the cost of temporarily changing the transportation method will be passed on to the factory. Even if it is not CIF, it is FOB, then the cost will be passed on to the buyer. No matter who it turns to, it is unacceptable. So these goods that have been stuffed on the road can only continue to wait. For those who are ready to ship, unless the buyer and the seller reach an agreement, it is very likely that they will continue to go by sea.
For some goods, it is obviously more cost-effective to ship by sea. For example, large furniture, especially acrylic furniture, are shipped by air, and they are given to the pivot. The cost of air transportation is very high. Therefore, it is very likely that air freight will not be changed. Therefore, whether to change to air freight depends on the nature of the goods and the terms of trade between the buyer and the seller.
Therefore, only those goods that are suitable for air transportation and that both buyers and sellers can bear the increased cost will be transferred to air transportation. From this point of view, in a short period of time, the impact on air transportation is not very large. But the long-term effects are likely to increase. why? This is because in the past two years, the port congestion has occurred frequently, and air transportation has been relatively less affected. Even during the epidemic, air transportation was still normal, and passenger planes were changed to cargo planes. It can be said that the impact has been minimized.
Many market analysts say that although the epidemic has greatly affected passenger transport, the impact on freight is limited. Of course, the capacity is also limited, but at least there is a solution. You can also look back at the previous market analysis articles, especially in the Asia-Pacific region (mainly China), the air freight throughput during the epidemic declined in a short period of time, but soon showed an upward trend.
Of course, the positioning of China’s “world factory” also contributes to its strong export. This time, the United States and many other places issued additional local currency, China did not follow, but the exchange rate of RMB against the US dollar did not fluctuate much. This is enough to prove that China’s productivity is needed by the world, and it will not follow the trend with the issuance of foreign currency. The United States has seen relatively obvious inflation, while China is still basically stable. Let’s just put it this way, even if the RMB appreciates, what should be exported should still be exported. It’s just so tugging. To put it bluntly, even if the domestic product is expensive, people still want to buy it. Because the production capacity of other countries can not keep up. Therefore, the world factory is not an empty phrase, it needs strength to prove it.
Looking back, I am still optimistic about the prospects of the airlift industry. The price of air freight fluctuates normally, and even the price of some destinations soars, which is actually determined by the market. Let us recall that during the epidemic in 2020, air freight positions were hard to find, and air freight prices continued to soar. Even now, the prices in South America have gone to the 7th or 8th prefix, but there are still many goods.
Customers may find it unacceptable, especially those who come from the sea. However, if you hesitate now, it may be more expensive tomorrow. And there are no positions yet. So now, continuous agent performance is very, very important! Click here to see what’s going on with agent performance.
That is to say, don’t skip delivery during the off-season, and squeeze the spot during the peak season. Don’t think that the airlines are all free, and they don’t deliver in the off-season. In the peak season, who will give you a seat? We must maintain a stable cargo volume and do incremental if we have the ability. Most airlines, as long as they operate properly, are very happy to see the cooperation between the two parties making steady progress.
So you have to ask me, why are some agents’ positions so stable during the peak season? Why is my position not stable enough? Then you might as well take a look at your past delivery records. Is it stable?
Of course, there is also a possibility that some agents have a signed allocation (yes, that is a generation). but! The allotment is also fixed. When the position is tight, who do you think his allotment will be reserved for? It must also be reserved for those customers with stable delivery. Therefore, be sure not to ask about the position everywhere, just leave one house and leave one, so that you can get credit. It may be that shopping around will have higher profits under the comparison price of a single ticket. But inconsistent delivery records can leave you without a spot during the peak season. At that time, it will not be a question of whether the profit is high or not, but the question of whether there is a profit. One is short-term interest and the other is long-term interest. You can balance it out.
So, whether the port is blocked or not, we are going to do the same thing. It is to stabilize our performance, whether it is for airlines or experts. As for the price, it is undeniable that the price of air freight has risen recently. Of course, the port congestion will also cause price fluctuations, but it is not as exaggerated as imagined. The positions are not enough, how much money should I add? At this time, the premium rate of each airline comes in handy. Want a position? With premium rate, give the location immediately! Speaking of this premium rate seems to be very magical, then we will do a special topic next time to explain.
To sum up, we should treat Hong Kong with a sense of normalcy and don’t be surprised. It should be yours that can’t go away, and it’s not yours that won’t fly to you suddenly. Just like the last time the Suez Canal was blocked, have we been greatly affected? no. So, how to drop or how to drop it.
This time we are here, see you next time.