CFA: Air cargo trade lanes can adapt to a trade war [VIDEO]

During a roundtable panel discussion at the 8th annual Cargo Facts Asia symposium held last month in Shanghai, executives from Agility and China Southern Airlines discussed the impact of the United States-China trade war on the Asia-Pacific air cargo market.

According to panelists, while trade flows have shifted in the region as a result of tariffs levied on goods traded between the U.S. and China, the trade war presents an opportunity for the region. The crunch on well-established trade routes now under the shadow of tariffs “allows the major economies in Asia-Pacific to reengage. The emergence of Vietnam is a direct result of the trade war between the U.S. and China, but at the same time, the Chinese economy is looking westward,” said Andy Vargoczky, Senior Vice President, Sales & Marketing, Asia-Pacific, Agility. Before the trade war began, “There was a lot of reliance on the trans-Pacific trade and European trade, and this is diminishing. I think this is good for Asia, and I particularly see a lot of SMEs emerging,” he added.

Dezhi Zhang, Vice President of Cargo at China Southern Airlines, acknowledged that “protectionism will of course have a negative effect on the air cargo business,” but also pointed out that despite the increase in protectionist rhetoric over the past two years, 2018 was the best year for air cargo in the past ten years. The flexibility air cargo enjoys as a mode is a major supporter of shifting trade lanes, after all – “if the factory moves to Vietnam or southeast Asia, I think the total volume of trade will not decline so greatly. The airline industry can adapt,” he added.

Check out highlights from the discussion below, which is part of a special video series sponsored by ATR.