Sat, Oct 05, 2002 page11

• Air carriers report increased bookings

  CARGO CRUNCH Scramble for new avenues for shipments in high-traffic months of Sept. and Oct. intensifies as airfreight companies reach capacity

  • BLOOMBERG
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  Asiana Airlines Inc, China Airlines Co (華航) and Asia-based airfreight companies say demand for air cargo space is rising as exporters try to bypass US West Coast maritime ports closed because of a labor dispute.

  ``Demand for cargo for the US from Seoul and Southeast Asian countries is high, and we are planning to fly two chartered flights to (Los Angeles) to satisfy some of the demand,'' said Asiana spokesman Ma Jae Young. ``Demand is usually high in Sept., Oct. and Nov., but the port closures on the West Coast may also have an effect on demand.''

  A US federal mediator stepped in Thursday to try to end the week-long closure of 29 ports in California, Oregon and Washington states. The shutdown, triggered by a contract dispute between dock workers and shipping companies, has forced carmakers, electronics companies and other exporters to delay production or find alternative ways to meet demand.

  ``Our schedule has been tight since Sept. and the cargo load factor has almost reached 100 percent,'' said Roger Han (韓梁中), a spokesman for China Airlines, Taiwan's largest carrier. ``We will add one to two charter cargo flights to Los Angeles each week starting from Monday.''

  Kintetsu World Express Inc's volume to the US has risen more than 10 percent since the port closure at the end of Sept., compared with the cargo handled by Japan's second-largest air cargo forwarder in the same period last year.

  ``We are getting more orders to airfreight auto parts to Chicago and Detroit,'' spokesman Hiroshi Akioka said.

  ``We have seen some abnormal airfreight cargo, such as sneakers or toothpicks,'' said Simon Wong, general manager of U-Freight Ltd, a Hong Kong-based freight forwarder.

  Swiss International Air Lines Ltd, which offers cargo services from Asia to the US via Europe, said demand had surged.

  ``We've definitely got more phone calls asking for additional space to the US'' through Europe, said Peter Goh, Swiss International's cargo manager for Singapore, Malaysia, Indonesia and Australia. ``But because of the desperate attempt to get cargo space, people are even using European carriers.''

  China Airlines raised cargo rates by 5 percent to 10 percent in the second half of Sept. because of strong seasonal demand.

  ``I don't think there is more room to increase rates,'' Han said.

  Cargo rates for charter freighters have increased about 15 percent as a result of the strike, said Spencer Lam, director of On Time Express Ltd, a Hong Kong-based freight forwarder.

  Not all airfreight companies are able to meet the demand.

  ``We have received some inquiries from companies who are looking for alternative ways to ship products to the US,'' said William Han, a spokesman at Korean Air Co, the nation's largest carrier. ``But we don't have any cargo space available to accommodate them because demand for cargo space is usually high during Sept., Oct. and Nov.''

  Sony Corp said the company uses air cargo to bring components to the US to make its Vaio PCs and other products in order to shorten the lead time for production.

  ``We do not want to use sea routes to convey parts for value-added products such as PCs and digital still cameras,'' said Keiichi Kamei, a spokesman of Sony EMCS Corp, Sony's purchasing and manufacturing unit.

  Cathay Pacific Airways Ltd (國泰航空), Asia's sixth-largest carrier by sales, will boost capacity ``if it is necessary,'' company General Manager of Cargo Kenny Tang said in an interview.

  The extra flights probably won't be enough to cater for the demand from exporters, said Sunny Ho, executive director of Hong Kong Shippers' Council, which represents exporters.

  ``Volume-wise, air freight accounts for less than 3 percent of exports from Hong Kong,'' Ho said. ``Airfreight space is tight.''

  More than 4,300 40-foot containers leave Hong Kong by sea to the US every day, said Ho.

  Japan Airlines System Corp, which has 10 freighters, doesn't plan to add extra cargo flights because of limited capacity.

  Asia's biggest airline currently operates 44 cargo flights to the US a week.

  ``We know that the demand (for cargo shipments) from or to the US is increasing due to the port trouble,'' said Japan Airlines spokesman Tatsuo Yoshimura. ``At the moment there are no plans to increase rates.''

  EVA Airways Corp (長榮航空), Taiwan's second-largest carrier, said it has no plans to charter any freighters or add any extra flights even though all of its cargo flights are at full capacity.
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