The global express and logistics group said recently that it has enlarged its airfreight network that spans Africa, Asia Pacific, Europe, Middle East and the Americas by adding additional consolidation services into Middle East and Africa and increasing the number of gateways. Additional measures have also been taken to enhance block space and part charter agreements with commercial passenger and pure cargo carriers.

“Demand for airfreight was the first to turn up amid the global economic recovery, driven by businesses restocking their inventories. Airfreight has risen back to levels before the economic crisis. On top of it, full ships and shortage of containers out of Asia forced some shippers to switch part of their goods from ocean- to airfreight,” explained Charles Kaufmann, CEO North Asia & senior VP, Air Freight, North Asia Pacific, DHL Global Forwarding. Kaufmann was sharing these insights at the 7th ChinaAir Cargo Summit held in Beijing.

“Based on our outlook for the year, we’re taking the necessary measures to bolster our airfreight capacity – increasing the number of block space agreements on commercial carriers and maintaining strong collaboration with Chinese national carriers,” added Kelvin Leung, CEO, DHL Global Forwarding North Asia Pacific.

“Trade lanes from Asia have seen a strong rebound in exports. Freight volume rose by 95 per cent in January and has now recovered to pre-crisis levels. As the world’s second-largest economy, China will fuel the airfreight growth, with freight volumes carried by Chinese airlines expected to see doubledigit growth this year.”

Asia will continue to lead
Asia will continue lead the global airfreight recovery and China, in particular, will be a key factor behind that growth. Intra-Asia trade is forecast to grow at 6.2 per cent CAGR fuelled by the increase in Chinese consumption and increasing intra-Asia trade with China.

According to DHL, in airfreight exports from China, Vietnam registered the strongest growth, followed by China’s air freight exports to Nepal, New Zealand, Malaysia and India. In terms of China’s airfreight import volumes from South Asia Pacific, Vietnam also registered the strongest growth, followed by Pakistan, Malaysia and Cambodia.

“China is undoubtedly the top destination in all intra-Asia trade lanes,” vsaid Kaufmann. “In the past two years, we’ve seen robust growth in our China- SAP trade lanes. For example, we have witnessed very strong growth in our ocean freight volumes from China to India and by 2015, airfreight and ocean freight imports are expected to grow by approximately 16 per cent per annum.”

“Amid the global economic recovery, we are seeing positive growth in the airfreight and ocean freight markets between South and North Asia Pacific. Driven by the apparel and footwear, electronics and engineering& manufacturing sectors, airfreight volumes from South Asia Pacific (SAP) to North Asia Pacific (NAP) is expected to grow 9.6 per cent CAGR by 2015,” said Amadou Diallo, CEO, South Asia Pacific, DHL Global Forwarding. “To cater to growing demand in these sectors, in 2009 we invested in extending our capabilities, establishing six Fashion and Apparel Centers of Excellence across Asia and the Life Science and Healthcare Competence Center in Shanghai.”

“The engineering and manufacturing sector accounts for the largest share of airfreight exports between SAP and NAP, while chemicals and life sciences will be driving the growth for ocean freight export till 2015. SAP-NAP ocean freight imports and exports will grow by 7-9 per cent by 2015, driven by chemicals and life sciences, engineering and manufacturing, and manufactured goods,” said Steve Huang, MD, DHL Global Forwarding, China North.

Similarly, air cargo volumes between North America and China are expected to grow eight per cent CAGR between 2010-2019, and 6.8 per cent CAGR for the same period between Western Europe and China. Excluding China, CAGR growth of air cargo volumes between rest of Asia and North America is projected at 5.4 per cent, and 5.2 per cent for air cargo growth volumes between Western Europe and Asia during the same period.

Over 85 per cent of westbound commodities from US to China are goods related to manufacturing and production including chemicals, machinery and intermediary goods – leathers and oils. Nearly 90 per cent of all exports from China to North America are consumer products including electronics, apparel, footwear and toys.

Healthcare a key driver
DHL saw a record number of movements of healthcare products in 2009 in Asia. Compared to 2008, shipment of finished pharmaceuticals, vaccines, medical equipment and devices and clinical trials facilitated by the DHL Life Sciences& Healthcare Global Customer Solutions grew overall by seven per cent, a steady growth despite the economic downturn.

“Two major factors driving this growth are the rising demand for healthcare in fast-expanding economies such as China and India, as well as the rapidly ageing populations in countries such as Japan, South Korea, Australia, Taiwan and Singapore,” according to Sue Arden, VP, Global Customer Solutions, Life Sciences& Healthcare, DHL Asia Pacific. The growth trend is not surprising given the increasing demand for quality healthcare and affluence in Asia, she added.

According to Datamonitor, pharmaceutical sales in Asia Pacific amounted to US$124.3 billion in 2009 representing 19.3 per cent of global sales. Sales are projected to grow steadily at a compound annual growth rate (CAGR) that exceeds 4.2 per cent from 2009 to 2014, reaching US$153 billion. From 2005 to 2009, the China market grew the fastest with a CAGR of 21.1 per cent and is projected to grow rapidly at a CAGR of 9.7 per cent from 2009 to 2014.

“The establishment of DHL’s first China Competence Centre in Pudong International Airport, Shanghai and a second scheduled to open within 2010 in Tianjin is a clear testament to the growing demand and opportunity we see in this sector,” Arden added.

“In 2009 the organisation further committed to invest US$15 million to develop the Competence Centers in India, Mumbai and Hyderabad targeted as the primary sites, and facility expansion in Singapore. We recognise that Singapore, known for its strong research facilities, not only manufactures pharmaceutical products but is also a key transportation hub receiving pharmaceutical products inbound from major manufacturing sources and providing storage and onward distribution service to Asia. The DHL Life Science Competence Centre in Singapore serves to support that thriving pharmaceutical industry. Vaccines have emerged as one of the growth segments in the global pharmaceutical industry. With a projected CAGR of over 13 per cent from 2009 to 2012, the industry will emerge as the fastest growing sector. The US and Europe represent the two largest vaccine markets in the world and will continue experiencing healthy growth rate in future.

Based on comparison of freighttonne- kilometres (FTKs) over the past 12 months, overall airfreight volumes increased 28.3 per cent, of which, 60 per cent of the volume increase was carried by Asia Pacific airlines, according to DHL.

“While airfreight volumes continue on an upward trend, airfreight operators, particularly in Asia, will cautiously plan their flights and cargo capacity in the market, to avoid an oversupply. The imbalance of the supply and demand will continue into Q2 and Q3 this year. Thus, the main challenge for us in the coming months is to acquire sufficient capacity at reasonable cost to fulfill customers’ demand for our airfreight services,” Kaufmann added.