Softening market in Europe clouds industry prospects

Hactl records decline in March air cargo shipments and expects little growth for year

PUBLISHED : Wednesday, 10 April, 2013, 2:22pm
UPDATED : Thursday, 11 April, 2013, 3:15am

Clouds are gathering over Hong Kong's air cargo market as demand from Europe withered in the first quarter.

Hong Kong Air Cargo Terminals Ltd saw a 2.6 per cent dip in tonnage last month, ending a growth streak that started in June last year.

The firm moved 246,912 tonnes of cargo, compared with 253,632 tonnes in March last year. For the first quarter, it still saw growth of 1.7 per cent.

Mark Whitehead, the chief executive of Hactl, expected the tonnage in the second quarter would be at best flat compared with the same period last year. He said the lukewarm economy in Europe was to blame.

"I don't see much growth for the year. We would be mirroring the business in 2012, the second best year in operation," Whitehead said.

The International Air Transport Association, however, expected the global cargo market to have a strong rebound in the second half.

Whitehead said the growth in demand from the Gulf area and intra-Asia trade would be offset by the softening in Europe, an important export market for Hong Kong.

Sunny Yu Ho-yuen, the chairman of ASR, a Hong Kong-listed independent logistic company, also cast doubt on the expected full recovery in the air cargo market this year.

"The industry is bound to revise down the cargo growth forecast for 2013 as the recovery in the United States is slow, while demand from Europe further deteriorated in the first quarter," Yu said.

He said the cargo market in the Yangtze River Delta was even worse than that in southern China and Hong Kong.

Airlines and freighter operators started to cut back capacity because the temporary rise in the shipment of electronic goods last month failed to boost freight rates. The all-in freight rate was HK$30 to $35 per kilogram.