As many in the industry are well aware, it’s the emerging
markets that hold out not only great promise of future
cargo growth, but also function now as a key backstop
to global cargo lethargy. At the recent Air Cargo India event it
was evident that although there are many headaches operating
in India, the country clearly holds great promise for future cargo
growth and in the meantime has provided a number of carriers a sort of shelter in the storm. So too for Africa, driven largely by surging traffic to and from West Africa and similarly Brazil.
A recent report – 2012 Agility Emerging Markets Logistics Index – sponsored by global logistics provider Agility and compiled by Transport Intelligence pointed to this very fact. Of 41 emerging markets – which were ranked by their investment potential and progress each year – ranked the top three as China, India and Brazil.
While no African country made the top ten, it’s time is clearly coming. The report is interesting for a number of reasons, one being the fact it underscores the ongoing potential of China, despite the sometimes negative perception that rising labour costs are pushing manufacturing elsewhere – which is to some degree true and helps spread economic development to neighbouring countries like Vietnam.
It’s clearly too early to count China down, let alone out. As the report notes China continues to power growth across the region with “all indicators pointing to China as an unstoppable economic force over the coming years.” India, while improving from last year, came in with a ‘room for improvement’ rating, which for anyone who has had even the briefest encounter with the country will surely agree on that front.
As far as Southeast Asia, Malaysia is a new entrant into the top ten while Indonesia remained steady. Thailand, while outside the top ten, was credited with demonstrating “high market potential” placing 14th on the rating on the back of good scores for market size, growth and market connectedness. And Vietnam, while down at number 27, was highlighted as the market to watch, as it offers “a stable environment and near-sourcing potential as China’s domestic economy grows.” One take-home lesson from all this, is that the intra-Asia trade is clearly set to bloom in the coming years. Already the spill-over economic growth from China into the rest of developing (and developed) Asia is having a beneficial impact on regional economies and air cargo flows. One pertinent example is Thai Cargo, which is supplementing falling volumes to Europe via its intra-Asia trade – from India to the Far East and within the Far East region itself from its Bangkok hub.
The truly exciting moment will be the bursting forth of trade between India and China, although for that day to come we will have to wait a little longer.
