Cargo volume on mainland Chinese airlines plunged 11.3 per cent year-on-year in November, reported Cargonews Asia, as a result of a downturn in consumer spending in Europe and North America. Shipments bound for Hong Kong and Macau fell by as much as 22.4 per cent. Hong Kong is an important re-export hub for mainland goods before they are shipped overseas.
Sunny Ho Lap-kee, executive director of the Hong Kong Shippers' Council, said factories in the Pearl River Delta were mainly working on old contracts, since no new contracts have been signed recently. Mr Ho predicted that the market would not show any sign of recovery until the third quarter of 2009, as the lead time for contracts for delivery is from six weeks to six months.
Chen Daqian, the vice-president of China Cargo Airlines, which carries 18 per cent of air cargo to and from Shanghai, said demand for high-end products, such as electronics and high-fashion goods, was withering. “We have secured no guaranteed contracts from freight forwarders this year because they lack confidence in demand,” he continued. Guaranteed contracts accounted for half of cargo space sold by the carrier in 2008.
Freight forwarders usually order partial cargo space from airlines on a yearly contract to secure lower rates and space during the peak season. But this year they expect rates to fall because of softening demand.
Mr Chen said China Cargo had trimmed services on US, European and regional routes amid weaker demand. China Cargo Air and Air China Cargo, the mainland's biggest cargo airline, might try to combine some services to save on costs, he said.