Cargo carriers eye boost from IPhone 5
With a huge potential market in Asia, the industry is counting on shipments of the new Apple device to help lift the depressed sector
With the launch of Apple's iPhone 5, air cargo carriers and freight forwarders are hoping the latest must-have gadget from the Californian-based technology company will provide a lift to depressed airfreight volumes, especially through Hong Kong.
Virgin Atlantic Airways spokesman Greg Dawson expected the flurry in shipments to buoy air cargo volumes for four to five weeks to ensure the handset was in shops by Christmas.
An executive with a cargo carrier said: "For Apple, the quality of service, speed of transit and security are all important considerations, which give Cathay Pacific [Airways] and the Hong Kong hub something of an edge."
After yesterday's announcement, retail sales of the iPhone 5 will start on September 21, followed by the launch of the iPad Mini at the end of next month.
HSBC analysts said the iPhone 5 was "the most important" of several smartphone launches in the next few months. They estimated the potential market at 78 million people in Asia alone, compared with 38 million for iPhone 4.
The cargo executive said several airlines, including Cathay, Singapore Airlines and cargo carrier Cargolux, which serve Chongqing, Chengdu and Zhengzhou either direct or through Hong Kong, were "attractive" to cargo owners.
Flights from these cities provide swifter access to Western markets for high-technology manufacturers in western China.
Foxconn Technology Group in Chongqing produces most iPhones, while accessories including headphones and battery chargers are sourced and shipped by firms including Shenzhen-based PCH International.
The cargo executive hoped "there are some pre-Christmas launches of new PCs, tablets, Kindles, etc".
He said: "We could do with some tonnage. All new product introductions are closely guarded secrets, and so product launches are hard to plan for. The good news, however, is that most new hi-tech products do move by air for speed to market."
The secretive nature of the launches and an unwillingness to be publicly quoted because it might affect Apple-related relationships meant nobody was willing to go on record.
But airfreight insiders said typically airlines including Cathay were approached by freight forwarders rather than technology firms such as Apple.
"We then negotiate space and rates with the relevant freight forwarders and wait to see if they are successful. Big shippers tend to use more than one freight forwarder - often divided up by trade lanes - but there are no fixed rules," the cargo executive said.
Another air cargo source said: "In Apple's case, because of the huge amount of new product that needs to be distributed in a very short time, it is impossible for them to use a single airline or logistics supplier to be able to carry all the shipments.
"For new products, however, airlines offering a direct service are usually preferred."
PCH uses FedEx, DHL and UPS to ship its accessories from its Shenzhen facilities, mainly through Hong Kong to customers worldwide.
Commenting on whether the launch of the iPhone 5 would cause a shortage of air cargo capacity in the run-up to Christmas, Paul Tsui, the chairman of the Hongkong Association of Freight Forwarding and Logistics, said: "For the time being, space is still manageable in the market. Only a few freight forwarders will benefit from the launch of the iPhone 5.
"The new product will fill up some of the empty space in the market, but overall most of the forwarders are suffering from the unstable economy."