Abstract:
The changes in the EU's tax policy on cross-border small parcels are impacting the European air freight market, but they have not affected the traditional peak season of air freight as scheduled. "Especially for the Australian route, the price is unexpected. The price from South China has reached more than 30 yuan/kg, and its historical freight rate has been basically around 20 yuan/kg for the whole year. At the beginning of this year, it was even only in single digits." The person in charge of an air freight forwarder told reporters from Cailian News that this is mainly due to the increasing trend of cross-border e-commerce items on this route, which has driven the growth of cargo volume there, but the shipping capacity of this route is relatively limited.
According to Xinhua News Agency, the European Union has imposed a 2-euro handling fee on low-value imported goods since November 1, after imposing a 3-euro tariff in July.
The person in charge of the aforementioned air freight forwarding revealed to a reporter from the Financial Associated Press that the current cargo volume of some cross-border e-commerce platforms in Europe has dropped by about 50% compared with before the implementation of the tariff policy. It continued to decline based on the decline after the implementation of the tariff policy in July. However, due to 1 January is also the peak season for large-scale trade cargo shipments, which basically fills the gap in e-commerce cargo. The combination of high aviation fuel prices and low passenger numbers has led to reduced passenger flights in Europe. At the same time, many airlines have adjusted their capacity to the US route, and European freight rates have increased slightly this week.
"The volume of cross-border e-commerce shipments from China to Europe has indeed declined. Despite this, the user scale of European e-commerce platforms is still very large, so demand still exists. Currently, many e-commerce platforms are gradually further expanding into the Middle East, South America and other places, which will also extend cross-border e-commerce transportation demand to these regions." Jakob Jeppesen, CEO of DSV Asia Pacific Air and Sea Freight, said in an interview with a reporter from the Associated Press during the 9th China International Import Expo.
In addition to cross-border e-commerce goods, demand for AI and semiconductor-related equipment continues, providing new demand support for this year’s traditional peak season for air transport. During the CIIE, many air transport companies, including Cathay Pacific Cargo and UPS, a subsidiary of Cathay Pacific Airways (00293.HK), mentioned the increase in demand for AI.
Xie Boqin said that this is closely related to the construction of global data centers, driving demand for the transportation of IT equipment, cooling systems, server racks, memory and other goods. Running data centers consumes a lot of electricity, so energy is the key to determining market distribution. Markets with sufficient energy (North America, Europe, Australia) are currently popular markets in this field and are expected to drive the strengthening of corresponding routes.
However, judging from the current situation, there may be resistance to subsequent AI infrastructure construction. According to reports, protests broke out in many European countries, demanding a suspension of data center construction.
Spot freight rates have not been affected yet. According to data provided by air freight forwarders to reporters from the Financial Associated Press, currently, the air freight price from South China to Europe is around 45 yuan/kg, which is slightly higher than a month ago. The price of the US line is around 60 yuan/kg, which is further higher than the "off-season" freight rate at the end of August (43 yuan/kg-50 yuan/kg).
As for the freight rate trend next year, fuel cost is the factor that air transport companies are most concerned about.
Wang Yiwei, President of UPS China, said during the CIIE that the air freight market is currently in the traditional peak season and short-term freight rates will still be at a relatively high position. However, for market changes in the next year, changes in fuel prices, supply and demand relationships need to be considered, so it is difficult to make accurate judgments at the moment.
“I think the basic freight rate next year will be relatively close to this year, but fuel prices are high. The current fuel cost is close to 2 US dollars/kg, while it used to be around 50 cents/kg. This may be the biggest factor affecting air transportation costs next year.” Xie Boqin said.
It is worth noting that we have now entered the stage of signing a board-packing agreement between freight forwarders and airlines for next year. The person in charge of the aforementioned air freight forwarding agency revealed to a reporter from the Financial Associated Press that apart from the fuel cost factor, he is expected to continue to be optimistic about the US route and bearish on the European route next year. This is also reflected in the quotations of airlines. The quotations for the US route are trending higher. Among them, the quotation for the US East route is around 50 yuan/kg.
At the A-share airline level, Air China Cargo (001391.SZ) mainly focuses on Europe and the United States in its air freight market. It recently publicly stated that under the influence of European tariff policies, combined with the relatively strong market conditions for U.S. air logistics demand this year and the company's capacity structure, the company has properly arranged its route plan and adjusted its route network to respond.
China Eastern Logistics (601156.SH)’s all-cargo routes cover international cities such as Chicago, Los Angeles, New York, Frankfurt, and Amsterdam. China Eastern Logistics has stated that as cross-border e-commerce solutions are affected by the cancellation of tax exemption policies for small packages in major European and American countries, the company has vigorously developed China Eastern's cold chain origin-direct solutions and customized logistics solutions.
Comments