EXTRANS GLOBAL - Air Freight News - Week 15

1. Air Freight General

1)  e-AWB Next is the ONE Record project

Ø IATA finalize standard cargo data sharing by 2025.

     - IATA finalize standard cargo data sharing by 2025.

- IATA presents the goal of so-called "early settlement of ONE Record" as the next project.

- The Digital Cargo Project is a ONE Record program that started in 2017, which is a common platform that everyone in the industry can use.

The goal is to create standard data and share it all, through which the air cargo market will achieve complete digitalization.

- All air cargo market players and partners, from airlines and forwarders to customs and ground handlers, regulators and shippers

Develop a data sharing standard function that can share data in the downstream/upstream process along the supply chain and transportation network.

- It is to ensure that all supply chain parties, including shippers, know immediately where their cargo is, and from January 1, 2026, IATA

The goal is to enable all member airlines to share and exchange data through ONE Record.  

2)  As the Russia-Ukraine crisis continues, demand for distribution centers in Central Asia is on the rise.                   

Ø   As EU sanctions on Russia expand, Russia's export and import cargoes are concentrated in Central Asia.

As a result, bottlenecks are increasing in some Central Asian countries.

- While the recovery of Russia's export and import routes is not easy, the export and import routes using Central Asian countries have expanded since last year.

- Russia is using Kazakhstan and Kyrgyzstan as bypass routes among Central Asian countries, and spent about 20 billion dollars last year.

Record the amount of income

• In addition to Kazakhstan and Kyrgyzstan, through various countries such as Armenia, Belarus, Georgia, and Uzbekistan

A bypass strategy is being pursued, but bottlenecks are gradually increasing due to poor infrastructure in the countries concerned.

Ø   Most of the major countries in Central Asia have difficulty securing storage space for import and export cargoes bound for Russia due to lack of infrastructure such as logistics centers.

-  After the Russia-Ukraine crisis, Russian logistics and shipper companies have opened logistics centers in neighboring countries to respond to economic sanctions.

As a result, demand for warehouses in Central Asian countries has increased significantly.

• Demand for logistics centers in CIS countries has more than doubled compared to before the Russia-Ukraine crisis, and about 400,000 ㎡ for smooth import and export

It is anticipated that more storage space will be required.

Ø   Russia is also pursuing a plan to secure a suitable logistics center in its own country as well as in neighboring countries.

Very poor professional manpower and construction environment for infrastructure construction

- In the long term, Russia requested the expansion of new logistics centers in major Central Asian countries such as Kazakhstan, Kyrgyzstan, and Georgia.

There is a significant shortage of suitable logistics center sites in the country.

- Some of the logistics companies are making various efforts to secure storage space, such as planning to build a logistics complex for the border area between China and Kazakhstan near Almaty.

- However, there is a lack of professional manpower related to the construction and operation of logistics infrastructure in Central Asian countries, including Russia, and the environment for new infrastructure construction is very poor.

è  While economic sanctions against Russia are expected to be prolonged, cargoes bound for Russia via Central Asian countries

It is expected to increase steadily, and the problem of supply shortage of logistics centers in Central Asian countries is also expected to continue for the time being.

3)  ‘Corona boom effect’ surpassed 5,000 forwarding companies in Korea

Ø   In the first quarter of this year, 4544 forwarders are in operation in major domestic regions such as Seoul.

 - Enthusiasm for starting an international logistics brokerage company (forwarder) continues despite the global shipping recession.

 - Analysis that small forwarders are increasing every year since the COVID-19 pandemic along with the emergence of digital forwarders following the activation of e-commerce

 - According to the Ministry of Land, Infrastructure and Transport, the number of forwarders operating in Korea last year was finalized at 5055.

 - As a result, the number of forwarding companies in Korea is estimated to be about 5,000 and about 4,000 companies registered with the Korea Customs Service under the Customs Act.

 - In fact, about 1000 forwarders can be estimated as companies that do not send manifest declarations themselves.

 - The high level of sea freight rates played a part in the background of forwarders' start-up craze.

   Since the COVID-19 pandemic, sea freight rates have soared and margins have also increased, so even small forwarders that handle small volumes were able to realize profits.

 - In the first quarter of this year, the number of forwarding companies operating in major domestic regions such as Seoul, Busan, Incheon, and Gyeonggi-do increased compared to the same period a year ago.

Scored 4544, an increase of 61

-  However, against the background of last year's shipping boom, it seems that the number of forced closures has increased among small-scale forwarders that have appeared in rapid succession.

As external negative factors such as the global economic downturn continue, forwarders who have not been able to maintain stability voluntarily close their businesses one after another.

4)  UK/Germany negative growth among G7 countries, Russia increased growth rate even during war

Ø   IMF forecasts UK to post worst performance of G7 this year

Ø   Russia contracted by 2.1% last year, but is expected to grow in 2023 (0.7%) and 2024 (1.3%) respectively

 - With the IMF projecting a global economic growth rate of 2.8% this year, the UK is expected to be the worst advanced economy this year.

 - Britain's gross domestic product (GDP) is projected to contract by 0.3% this year, worse than the G7.

 - The IMF's World Economic Outlook predicts that the UK will grow by 1% in 2024.

 - On the other hand, the US is expected to grow by 1.6% this year and 1.1% in 2024.

 - Eurozone expected to grow by 0.8% in 2023 and accelerate to 1.4% next year

 - Germany is expected to grow by 1.1% in 2024 after declining by 0.1% in 2023

 - France grows by 0.7% and 1.3% this year and next, respectively, Italy (0.7% and 0.8%) and Spain (1.5% and 2%) both this year and next.

 - Japan is expected to grow 1.3% this year, followed by 1% economic growth in 2024, Spain 1.5%, India 5.9%, Brazil 0.9%, Mexico 1.8%, Nigeria 3.2%, etc. this year.

5)  Airline/GSA Event update 

(1)  MET EXPRESS AIR Incheon service, B737F twice a week

-  B737 freighter in service from Incheon to Taiwan TPE from the Philippines as of April 28

-  Specialized cargo including general cargo, special cargo, dangerous cargo, PERISHABLE cargo, etc. will be handled.

-  MEX EXPRESS AIR CORP. is a Philippine national airline established in 2021 and serves as a hub airport for CRK, MNL, and CEB.

-  ICNTPE MX801(D35) ETD 0300 / ETA 0900 via CRK, expected to increase DAILY from June

(2)  BA Beijing Shanghai cargo service resumes

-  UK IAG cargo division resumes cargo services on London-Beijing and Shanghai routes.

-  According to the opening of China's borders, British Airways, a subsidiary, has been able to service through the Passenger Valley according to the route operation.

-  Cargo service available on LHRPVG routes from 23 April. B787-900 input

-  LHR-PEK resumes 4 times a week on June 3rd. B777-200 commitment plan.

(3)  Jeju Air, 4 flights a week to Mongolia (June-September)

-  Plans to operate 4 times a week (D3467) on the ICN-ULN route from June to September, the peak travel season for Mongolia, after receiving a traffic ticket from the Ministry of Land, Infrastructure and Transport.

-  Jeju Air's Ulaanbaatar route operated 106 flights for three months from June 29, 2022 to September 29, 2022, recording an occupancy rate of about 87% during that period.

(4) “Korea-Indonesia Golden Egg Route” Airlines Competition

- The International Air Transport Association predicts that by 2034, Indonesia will emerge as one of the world's top five aviation industrial countries along with the United States, China, India and the United Kingdom.

Currently, the only airlines operating in Indonesia are Korean Air and Asiana Airlines.

- Jeju Air plans to operate charter flights between Manado and Batam, Indonesia from 5/18 to 5/19.

- T’way Air plans to attack the transportation area with the A330-300 introduced last year.

- Air Busan is expected to prioritize the justification for expanding new routes centered on regional airports, such as the Busan-Indonesia route.

- Air Premier, which is introducing B787-9 large aircraft one after another, is also planning to take on the challenge.

(5)  Garuda Indonesia(GA) ICN-JKT extension, part of 5/8 : ICNJKT 2W->3W(D126) GA879 1035/1535 A330

(6) EVA AIR (BR) ICNKHH re-operation 5/2: ICNKHH 4W (D2457) BR171 2045/2240 A320

(7) ETHIOPIAN AIRLINES(ET), ICN-ADD extension, part of 5/7 : ICNADD 4W->5W(D12467) ET673 0105/0705

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