The big get bigger, the small?
- Latest News
- Friday, 03 September 2010
Citing mitigating factors including US unemployment hovering around the 10 per cent mark, housing sharply lower, an anaemic stock market and manufacturers just marking time, Keeling said he expects air cargo will show little growth for the remainder of the year.
"Retailers are taking their cue from shoppers' reluctance to open their pocketbooks and have become very miserly in continuing to build up inventory," said Keeling, the chief executive of Consolidators International.
"Air freight has enjoyed a sharp increase in volume during the past number of months, but much of that growth, in hindsight, can be credited to restocking of inventory and not for sales to the ultimate consumer," said Keeling. "The supply chain seems to have snapped at the
retailer's warehouse."
Keeling says airlines are becoming cautious about the next few months as their rates remain flat. Carriers seem content to be keeping their fuel charges in effect rather than raising rates," he said.
Cargo volume also will be handicapped by the slowdown in US exports, believes Keeling.
"Chinese expansion is moderating as are other Asian nations' economies," commented the forwarder. "Surprisingly, Europe, which had been given up for dead as a trading partner, is showing unexpected liveliness. Germany, in particular, has become one of the most powerful export nations in the world with an actual shortage of workers. Air freight is participating in this Teutonic growth, particularly to the Middle East and Asia."
One development, however, should benefit air freight, particularly for last minute ordering of goods. Many ocean lines are to continue "slow steaming", taking longer times between ports. Maersk Lines recently announced it will continue slow steaming indefinitely and since most other shipping lines follow Maersk's lead, air freight will be needed in many instances to move merchandise in time for Christmas selling, Keeling suggests.
Keeling does not see a particularly bright future for the independent forwarder in international trade. "The integrators, particularly FedEx and UPS, continue to gain market share as shippers reduce the number of their suppliers. The two integrators have built up infrastructures in Asia at enormous cost, but this expenditure seems to be paying off.
They are providing excellent service and shippers seem to be willing to pay their higher rates in return for this service."
Keeling expects a dwindling number of independent forwarders to participate in global trade in the months and years ahead. "There now are only seven independent, multi-national forwarders of any significance:
DHL, Schenker, Panalpina, Kuehne & Nagel, Expeditors, UTI and Ceva.
"Smaller forwarders will have to be content to get crumbs from their tables," he added.
