The balance of power on Chinato Europe routes is shifting towardsChinese carriers, the World Air CargoForum in Dubai heard.
Wolfgang Meier, head of owncontrolled capacity for forwarderPanalpina, noted the large amountof new capacity, most of it from Chinesecarriers, that was being put ontoChina-Europe routes, and also a shiftamong shippers.
"The decision-making about logisticssupply chains is shifting fromoutside China to inside," he said. "Forexample, Huawei and Lenovo now decide on their own supply chains."
On the capacity front, he listedthe large number of new services toEurope recently launched, includingGreat Wall, with six flights a weekrising to ten soon; Yangtze River Expresswith its four weekly flights toLuxembourg,
Shanghai Airlines, which has addeda second B747 freighter and wouldincrease frequencies out of Pudong,and the expanding services of JadeCargo International.
"From 2003 to 2005 freighter capacityon China-Europe routes has beendominated by the European legacycarriers, but now that has dramaticallychanged," Meier noted. "The footprint of Chinese carriers is increasing, and will further increase."
Meier was concerned about possibleover-capacity on China routes,however. "From the agent side I am happy with added capacity, and trafficwill grow 10-15 percent this year, so itis needed. But you begin to ask howmuch capacity is too much, or when alow rate becomes too low," he said.
He feared that over-capacity mightlead to carriers charging "astronomical"rates in the peak season to pay fortheir operations the rest of the year: "At Panalpina, we would like to avoid that and see a healthy balance between supply and demand."
Competition for European playersis not just confined to the airline side.Meier said there were many "localhero" forwarders who were competingwith the multinational players, andthat there was still no level playingfield for foreign entrants.
"There are still local restrictions,still government bodies involved," hesaid. "There are still different A licencesfor different activities in differentregions, and the way the rules are interpretedchanges from place to place.
It is not even yet clear if owners of ClassA licences can have direct billing processes. One airline says we can bill them directly, whereas another airline says we cannot."
– Peter Conway