Even as it continues to grow, the trans-Pacific airfreight market remains a creature of habit. The imbalance that has long characterized this trade lane, with eastbound volumes greatly outweighing those for westbound shipments, has hardly changed. And it's the established airlines, rather than the newcomers, that are adding most of the capacity required to meet increasing demand.

But those old habits appear to be changing, if just a little. For one thing, westbound traffic is seeing signs of life as China's huge consumer market begins to stir and Japan's long-suffering economy starts to revive. For another, more Asia-based carriers than ever are serving the trans-Pacific trade. The newer entrants want to become more significant players in this profitable market and are taking prudent steps to foster long-term traffic growth.

New entrants in any market usually means more capacity, service options, and lower rates. So far, however, the arrival of more Asia-based airlines in North America hasn't greatly affected market conditions. Still, their addition to the pool of trans-Pacific carriers is a trend that bears watching.

The trans-Pacific market accounts for 15 to 20 percent of the world's air cargo volume on a freight ton-kilometer (FTK) basis, says Robert Dahl, a project manager at market research firm Air Cargo Management Group in Seattle. (One ton-kilometer represents one ton of cargo traveling one kilometer.)

According to MergeGlobal Inc., a market research firm in Arlington, Va., eastbound FTKs will increase an average of 6.7 percent annually over the next five years, up from 4.3 percent average annual growth during the previous five years. (That includes the nearly 17 percent drop in traffic after Sept. 11, 2001.) Westbound traffic from North America, meanwhile, is forecasted to grow 6.3 percent annually through 2007, matching the growth rate of the previous five years.

Although those prospects for growth are attractive, the trans-Pacific market suffers from seemingly intractable traffic imbalances. In 2003, eastbound traffic destined for North America totaled 24.2 billion FTKs, while only 13.8 billion FTKs flew the westbound leg during the same period, according to MergeGlobal principal Brian Clancy.

Air carriers historically have allocated additional capacity and made almost all their profits by meeting the growing needs of eastbound shippers. "There will always be (surplus) capacity westbound," says Gary Schultheis, vice president, North America, for freight forwarder DHL Danzas Air & Ocean.

Not surprisingly, trans-Pacific rates reflect that directional imbalance. Carriers charge much higher rates on the eastbound leg to North America, which usually operates at close to capacity. Growing demand, coupled with higher fuel prices reflected in fuel surcharges implemented earlier this year, means importers are continuing to absorb heftier freight costs.

Opportunistic North American exporters can take advantage of the less popular westbound backhaul—usually averaging 40 to 50 percent capacity utilization—to purchase cheaper service. For example, big freight forwarders typically pay $2.60 to $2.80 per kilo to Chicago from Hong Kong, a major gateway for China-origin cargoes. The wholesale rate for cargo traveling in the opposite direction is about 80 cents per kilo, according to Clancy. During the peak season, eastbound wholesale rates jump to $3.00 to $3.40 per kilo, while westbound charges average $1.10 to $1.15. The westbound pricing essentially covers carriers' operating costs when returning aircraft for quick turnaround in Asia.

The flood of eastbound cargo has drawn the attention of virtually every major Asian airline, and some carriers offer dozens of flights weekly.

One example is the schedule flown by Korean Air (KAL), the largest trans-Pacific freight carrier. The Seoul-based airline offers ample capacity and market coverage, made possible by an "open skies" agreement between South Korea and the United States. KAL offers 52 weekly B747-400 ER freighter flights between Seoul and eight U.S and Canadian gateways, says Heedo Lee, Korean Air's U.S. marketing director. KAL also charters additional flights during the peak shipping season and serves other markets in Asia via overnight service from Seoul.

EVA Airways of Taipei is another significant Asia-based player in the trans-Pacific market. The carrier, which began providing service in this lane in 1995, flies to six U.S. gateways with both freighter (B747 and MD-11) and combination aircraft on 37 weekly flights. EVA's total U.S.-dedicated capacity is about 17,000 metric tons per month.

Other Asian carriers have also increased their trans-Pacific cargo flights in the last few years. Just two examples: Nippon Cargo Airlines now operates 18 freighter flights each week between Japan and the United States, up from 13 about five years ago, says Senior Advisor Peter Diefenbach. Singapore Airlines earlier this year added thrice-weekly freighter service from China to Chicago.

And it's not all freighter traffic. Belly space on passenger airlines remains an important source of eastbound capacity. All Nippon Airways, for example, carries about 20 metric tons of cargo on each of its 35 weekly passenger flights from Japan to five cities in the United States, says General Manager Ichiro Yamauchi.

While Asian airlines are pumping up service, they're facing plenty of competition from U.S.-based carriers. UPS has doubled to 12 the number of flights it offers weekly between Hong Kong and the United States, and originates a total of 24 flights each week from Osaka, Shanghai/Beijing, and Tokyo. Archrivals FedEx and DHL have both seen double-digit growth in their business in China and have increased their investments in that market. Other U.S.-flag airlines offering trans-Pacific cargo service include American Airlines, Northwest Airlines, Pacific Air Cargo, Polar Air Cargo, and United Airlines.

If there's a wild card that could affect trans-Pacific market dynamics, it's China. That country's recent emergence as the world's factory floor, churning out goods destined for North American and European markets, has pushed demand for air cargo service through the roof. Eastbound volumes from China are so strong, in fact, that freighter service offered by UPS from Shanghai and Beijing has been fully subscribed since it began in April 2001, says Don Herbert, vice president, air cargo.

Strong demand usually means higher rates, and that has been true for traffic coming out of China. According to a statement by freight forwarder Expeditors International of Washington, rates for cargoes originating in Shanghai have seen increases "well into the double digits."

This apparent cargo bonanza has led some Asia-based freighter operators to deploy the bulk of their capacity to provide feeder service from China to export gateways along China's coast as well as in Hong Kong and Japan, says Ted Scherck, president of The Colography Group, an Atlanta-based market consultant. From there they may operate their own flights or interline with established carriers to serve North America.

Regional carriers that want to enter or have recently entered the North American market will fly across the Pacific, adding capacity and providing increased competition, only after they've maximized their opportunities in the burgeoning intra-Asia market. For them, partnering with established airlines offers early cost and service benefits.

Indeed, the more established airlines continue to carry the bulk of the eastbound traffic. Consider, for example, that the three leading China-based airlines—China Eastern, China Southern, and Air China—together offer only about a dozen freighter flights each week to the United States. Those airlines are the dominant players in the People's Republic following an industry consolidation forced by the Beijing government.

China Southern operates twice-weekly B747-400 freighter service between Shenzhen and Chicago. The airline is eager to provide additional service to the United States, ideally in conjunction with an American code-share partner, says spokesman Jeff Ruffolo.

Air China, meanwhile, offers six weekly freighter flights to New York and Chicago, and four to Los Angeles (two of those flights also stop at Portland, Ore.). China Eastern's cargo arm, China Cargo Airlines, recently entered the U.S. market with direct flights from Shanghai to Dallas-Ft. Worth.

Shanghai Airlines, which serves 40 cities in China, has teamed up with EVA in order to gain access to North America. The two carriers recently expanded an agreement they signed last August, under which Shanghai's five weekly freighter flights to Macau will feed traffic directly to EVA's eastbound flights.

Analysts don't foresee radical changes in trans-Pacific market dynamics in the near to medium term. But growing trade with China may take at least a small bite out of the trans-Pacific's chronic traffic imbalance. MergeGlobal's Clancy, for one, expects the directional gap between eastbound and westbound cargoes to slowly decline as the Chinese economy matures and consumer demand boosts imports of "air-eligible" commodities. Demand for capacity into China, in fact, is already picking up. Currently, year-over-year westbound tonnage is up about 20 percent, estimates KAL's Lee.

Even faster growth of U.S.-China airfreight volumes could be in the offing. A new bilateral aviation agreement between the United States and China, finalized in June, calls for 111 new cargo flights by airlines from each country over the next six years. That agreement opens the way for more Chinese carriers to offer service to North America, and for those already doing business here to boost the number of flights they operate.

If trade growth—especially with China—continues to rise, the airlines may overreact and add capacity well beyond the immediate needs of the trade, says The Colography Group's Scherck. If that's the case (and he believes it's inevitable), in about five years rates will fall, and the eastbound imbalance and seasonal capacity issues will have much less of an impact on shippers' costs.

Freelance writer Ira Breskin covers international transportation. Managing Editor Toby Gooley contributed to this article.