Air Cargo Shippers Not Likely to See a Surge in Pricing Next Year

According to Charles W. “Chuck” Clowdis, managing director, Transportation Advisory Services for IHS Global Insight, this slow growth still reflects rates that have remained stable for most of the past year.
By Patrick Burnson, Executive Editor
December 12, 2012 - SCMR Editorial

While Air cargo volumes have crept along at a snail’s pace during most of 2012. The year is apparently going to end without a push for last minute electronics and other higher value retail goods to fill the space on cargo planes to capacity.  According to Charles W. “Chuck” Clowdis, managing director, Transportation Advisory Services for IHS Global Insight, this slow growth still reflects rates that have remained stable for most of the past year.

“Even the strike at the posts of Los Angeles/Long Beach did not last long enough to push goods from sea to air as inventory carrying stocks may have become threatened,” he said in an interview.  “It is our feeling that rates will continue to remain at present levels during 2013’s First Quarter and likely remain so unless there is a discernible economic recovery that will include robust consumer spending.”

Some hope for a recovery exists by next summer, however. Clowdis said mid-year spending may see a bit of an upturn for air freight items if new electronic items are released.

“Likewise consumer spending on relatively high value goods could return with a rise in the economy,” he said. “But this scenario is unlikely looking forward six months or so. Six months into 2013 will find us most likely awaiting a change in the economic situation hopefully coupled with a drop in unemployment.”

Clowdis said that “Back to school” will not have a large impact on air cargo rates in the third quarter of 2013.

“But we feel the industry may eek-out a small, less than 1.5% increase,” he said. “The economy is coming to grips hopefully with the impact of any tax changes or health care costs that will be impacting by September 2013.”



About the Author

image
Patrick Burnson
Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at .(JavaScript must be enabled to view this email address).

Subscribe to Logistics Management magazine

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your
entire logistics operation.
Start your FREE subscription today!

Recent Entries

The year 2015 marks a major milestone for the industry, MHI is celebrating its 70th anniversary at ProMat 2015, held March 23-26, 2015.

While the Federal Motor Carrier Safety Administration has made strides in regards to better oversight of motor carriers through its Compliance, Safety, Accountability (CSA) and chameleon vetting safety programs, there is room for improvement for it to improve its oversight to better target high-risk carriers. That was the thesis of a report released this week by the United States General Accountability Office

With an eye on capitalizing on future trade and commerce growth in South Asia, express delivery and logistics services provider DHL today rolled out its plans to build an $85 million EUR ($93 million USD) DHL Express South Asia Hub, which will be a 24-hour express hub facility within the Changi Airfreight Center at the Singapore Changi Airport.

While the Federal Railroad Administration (FRA) has long stated its goal of having Positive Train Control (PTC) technology installed on 40 percent of its network by December 31, 2015, railroad industry stakeholders have repeatedly stated that reaching that deadline would be a stretch. It now appears that the railroad sector has some members of Congress sharing the same line of thought with legislation rolled out this week that pledges to extend the PTC deadline to 2020.

West Coast port authorities may be overstating the obvious when they decry “business as usual.” But it’s refreshing to see them finally coming around.

Article Topics

News · Global · Transportation · Economy · All topics

About the Author

Patrick Burnson, Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review. Patrick covers international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. Contact Patrick Burnson

Comments

Post a comment
Commenting is not available in this channel entry.