After a tepid start to the year, the air freight market began to sizzle during the second half of 2016, with y-o-y monthly gains of 9.1%, 6.8% and 9.8% in October, November and December. Looking back, was this a result of rising underlying demand for air cargo, or the work of one-off events, such as modal shift from the bankruptcy of the world’s seventh largest ocean container liner, South Korea-based Hanjin? According to a Container Insight Weekly report published by UK-based freight market analyst Drewry, Hanjin’s bankruptcy had little impact on the 2016 peak season.
While evidence does imply that the bankruptcy of the world’s seventh largest ocean container liner provided a boost to airfreight rates, data from US customs suggests modal shift was not a major force behind higher air freight volumes. Looking at US inbound aggregate cargo volumes (air + ocean), between 2015 and 2016, airfreight’s share of the overall cargo moving across the pacific fell from 2.6%, to 2.5%. Despite a low overall market share of just 2.5%, air freight handled approximately 44% of the value of US inbound cargo. In a year-to-year comparison of customs data by commodity, Drewry found that in 2016, air freight saw robust growth in only four of the top 10 commodities which typically make their way into the US by ocean freight, which can be taken as evidence that the impact of modal shift from ocean to air freight was negligible.
What then, caused the surge in demand during the second half of 2016? IATA points to consumer demand which outpaced lean inventories and thus required the speed of air freight to replenish stock, and new product launches as likely drivers.
Anecdotal evidence of such charters is plentiful, and given that it is Friday, we will take this opportunity to share one of the more impressive charters associated with last year’s peak season– if for nothing else, then for the opportunity to share an awesome video. In November 2016, France-based freight forwarder Bolloré Logistics was asked by its client Colbún, a Chilean power utility, to transport a 140 tonne transformer from São Paulo, Brazil, to Santiago, Chile.
Origin and destination are only about 2,500 km apart, but with the Andes mountains between them, road transport was not an option. And ocean wasn’t attractive either, with the 7,500 km route requiring passage around the storm-wracked southern tip of South America. After organizing several charter flights to carry various support material and additional loading equipment from all around the world, an Antonov 225 was brought in for the main job, and the transformer was successfully delivered. At 140 tonnes, it was the heaviest single piece of cargo ever airlifted within the Americas.
As promised, here is a time-lapse video of the An-225 being loaded with the massive transformer:
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