Backward March in Shanghai

Shanghai Pudong International Airport Cargo Terminals Co. Ltd (Pactl), is the biggest cargo handler at Shanghai’s big international airport (PVG). It is almost always the first major player in the air freight industry to report monthly results, and is often seen as a bellwether for the industry as a whole. No one carrier or handler can really fill that role, but Shanghai Pudong is one of the busiest cargo airports in the world, and Pactl’s results can’t be ignored.

So what are we to make of Pactl’s March performance? After reporting its combined January/February handle up 19.8% y-o-y, Pactl dropped back to earth, reporting its March handle up just 2.3% y-o-y to 133,000 tonnes. For the first quarter of 2015, Pactl’s handle was up 12.7%

It really is hard to know what to make of the 2.3% year-over-year gain in March. In theory, the timing of the Lunar New Year holiday should not have much, if any, impact on March air freight demand. But there was still a significant backlog at the US West Coast ocean ports for at least the first half of March so, again in theory, trans-Pacific air cargo, especially ex-Asia, should have seen something of a boost.

But a look inside Pactl’s 2.3% overall gain has us scratching our heads. Almost 95% of the cargo that moves through Pactl’s terminal is international, and in March, Pactl’s outbound international handle fell 7.3% y-o-y to 69,000 tonnes. The overall 2.3% gain was driven by a 17.5% increase in inbound international cargo to 56,000 tonnes.

Anybody out there care to theorize?

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