Insiders say air cargo on the way to recovery, though seaports still lag

Industry insiders say they see evidence of a slow recovery in the air cargo business, according to Xinhua.

Some companies with more competitive strengths are undergoing expansion, aiming to widen their spectrum of services to become a comprehensive logistics service providers and to cement their status for the future, said the report.

By contrast maritime ports are stagnant, beset by an atmosphere of anxiety. In the last two years, cargo volume was still growing though slower than capacity. But this year it started to shrink, attaining lows not seen since the 2008 downturn.

In the first half of this year, the top 10 ports in China registered a year-on-year throughput growth of only 7.9 per cent compared to the 11.3 per cent year-on-year increase in the first half of 2011. Shenzhen recorded the lowest growth rate of 1.7 per cent, followed by Shanghai's 4.8 per cent.

Shanghai International Shipping Institutes' survey showed that in the first three quarters, the industry prosperity index was 97.42 points, falling 20.72 points down from the first quarter into below the critical level of 100 points.

But the latest report from Shanghai airport showed that, in September, the airport's throughput was heading up and increased 1.75 per cent year on year to 261,500 tonnes. Meanwhile, airports in southwest China's Liuzhou, north China's Zhengzhou, northeast's Shijiazhuang and southern city Shenzhen have all reported growth. Shanghai Airport Authority CEO Li Derun sees this as a sign of recovery.

While in downturn, a number of leading players in the air cargo market were busy launching another round of expansion. FedEx announced plans to build new express package handling facilities in Shanghai's Pudong Airport, making the airport the first in the world to have facilities of FedEx, UPS and DHL. In fact, since UPS and FedEx was granted the operating license for domestic express business by the government, the invisible wave of seeking expansion has become stronger in the industry. On the other hand, China Eastern Airlines' cargo arm, China Cargo Airlines and Air China's Air China Cargo have finished reorganisation last year and have expanded their fleet.