Airline Demand falls after slowdown

DELTA AIRLINE

Air freight at west coast ports suffered from a slowdown and unfortunately it has still not fully recovered. According to Delta air lines Inc. there was a 20% decrease in revenue which indicates that U.S handlers are finding the prices harsh and in turn this seems to be causing the decrease. The strike of the west coast port has ended yet the effects remain on the cargo airlines. 

Statistics have been provided to further emphasize the decrease and tough effect of the slowdown on the air line. Last year Delta’s cargo revenue was $244 million yet from the quarter to September it had dropped to $196 million, decreasing by a 10% fall in three months.

Ed Bastian, the president of Delta stated that the cargo business and passenger business are going through the same issue. Domestic and local seems safe and steady while internationally, it’s decreasing.

PASSENGERS

Although the airlines went through a high in business early in the year while all the port disruptions went on, it seems that the boost only lasted up till summer. Trade groups report the increase slowly trailed off leaving a lower revenue then before the west coast port disruptions.

When it comes to domestic Cargo then the airline does succeed others yet in regards to freight volume it falls behind. Freight volume leaders are United Continental Holdings Inc. as well as American Airlines Group Inc. after these two comes this airline which is based in Atlanta. 

Although more of Deltas running system is based on Trans – Atlantic routes rather than pacific trade lanes statistics show that united and American faced less declines then Delta. 

US AIRLINES

Out of all the U.S airlines the first to have third quarter income has been Delta. With cargo becoming less essential handlers are looking for other opportunities and investments to make up for the loss they seem to be suffering and the decrease in what is the core of the cargo industry, the passenger business.

Looking at the statistics it’s important that Delta take progressive steps to avoid a further fall in revenues. 2007 had reached a peak of $1.7 billion yet last year’s cargo revenues totaled a mere $934 million. This has been a significant blow to Delta and the financial crisis and west coast port disruptions, strike and slowdown seems to have had its effect on the financial earnings and cargo revenues of this particular airline quite heavily.

Asia-Europe Freight Shipping Rates In The Gyre

Asia-Europe shipping rates of freight services continued reporting declines from 15-weeks – due to volume declines

cargo ship

The spot rates of freight services continuously decreasing since 15 weeks, due to decline in volume. Due to this downfall in volumes, the revenue of the freight companies is greatly affected. it is a situation of high and dry for the freight carrier services to down the revenue back again. the major reason of the declination of spot rates was the drop of the head haul volumes. on the other hand, china’s golden week holiday put a strong impression on trades and shows continuous fall. after golden week holiday of china, carriers start freight services from shanghai containerized freight index described more drop on two major trades of scfi.

The spot rates of cargo services between north europe and shanghai cut down by 54 dollars this week, reporting 259 dollars per teu as a final value. this year reported the least spot rate as compared to the all decreased values spot rates. on the other hand, mediterranean port’s spot rates also decreased by 69 dollars, reporting 224 dollars per teu as a final value.

graph bar

In spite of succeeding healthy fundamentals of the market, the spot rates of freight services belonging to transpacific also continued fall. the spot rates cut down to 94 dollars and 119 dollars towards the west and east coasts of us. it is told that the spot rates went low and reaching 1,197 dollars per 40 feet for pacific coast and stated 2,199 dollars per 40 feet for the atlantic.

From these statics  it is very much clear that the latest gri planned by asia-europe carrier companies in september have no effect on the spot rates of freight services. it is seen that the gris of 1000 dollars, driving the spot rates to rise for about two weeks at the start of the month, before showing the loss of gains and more while the rest of the month. from this information, carrier companies have planned to throw more gris in a range of 950 dollars to 1,200 dollars per teu, in between north europe and asia, which may come into result from november 1st, 2015.

europe to asia

It is estimated that the new gri offers would rise the spot rates of cargo rates, which likened with the full world, would lead to 500 percent increase in spot rates.the present condition of trades of asia-europe shipping rates shows that there will be a continuance in it, mostly in between geneva and copenhagen at least for some future weeks. For cheap sea cargo services to Pakistan, Astarcargo.co.uk is a best and reliable company for sea cargo to Pakistan.

New Cargo Pricing Structure by BAC

After Lufthansa and World Cargo, Brussels Airlines Cargo to Introduce New Freight Pricing Structure

LUFTHANSA

Brussels Airlines Cargo (BAC) is going to announce new freight pricing, which will be a comibination of net price and surcharges. The new pricing structure will be applicable from October 2015. According to a report, two sister companies named Swiss World Cargo and Lufthansa Cargo are also following the similar price structure for their air freight services.
Brussels Airlines Cargo expects that the changed price structure would fulfill the demand in the market, growing their transparency. According to Brussels Airlines, they want to include the only single freight surcharge which is consolidated. They are not interested in adding any other surcharges on freight rates.

AIR CARGO FREIGHT

This strategy will increase traffic for the freight services and on the other side, it will completely decrease the losses. After the announcement of the increase in freight prices two sister companies, Swiss World Cargo and Lufthansa Cargo also announced that they are going to set new pricing structure for the coming winter season. Contact to www.cargotopakistan.co.uk for reliable freight services to Pakistan at affordable prices.
According to BAC the new price is unique in the market and new price structure with single surcharge will continue in future without addition of any other surcharges. BAC stated that in new pricing structure only one surcharge will be included, mainly on the air freight. The only two elements in the price structure of Brussels Airlines Cargo are fixed price of freight and air freight surcharge.

BRUSSELS AIRLINES

The single surcharge in the new price structure will replace all other surcharges. According to a source the single surcharge air freight surcharge (ASC) consists of few other charges like airport taxes, security and fuel cost etc. All these are external surcharges beyond the control of Brussels Airlines.
BAC remarked that all these external expenses may fluctuate according to the conditions. Due to these fluctuations, the air freight charges may also fluctuate from time to time. According to BAC that the new price structure will not dishearten the customers. Compared to old pricing structure, the new price is adjusted according to the unbiased effect on prices.
The new price structure which was announced by the Lufthansa Group for freight services is very much different from the rate model which was announced by Emirates and also different as compared to other rate models offered by IAG and Qatar Airways. It is yet to be seen if the new price structure announced by Brussels Airlines Cargo is successful or not.

Thumbs up for Heathrow’s Third Runway

With a collective support of UK’s freight community to Airports Commission, result came out in favour of a new runway at Heathrow and it will be a cargo runway.

Heathrow Airport proposed North West runway

Heathrow expansion would permit the airport to increase its freight capacity up to 3 million tonnes. The commission found that a new runway at Heathrow airport would produce up to 147 billion Pounds in GDP over 60 years ,provides more than seventy thousands new jobs and permit carriers to add about forty new destinations.

Heathrow Runway

According to a survey, new runway at Heathrow is great for most trade, manufacturing and especially for production industries who are working in UK such as Pharmaceuticals industries. Total value of goods that moved through UK airports was more than 140 billion Pounds in 2014.

Nick Platts

Heathrow appointed Nick Platts as Head of Cargo and put more emphasis on its freight procedures. Nick Platts told that he is excited because this is good step for UK’s economy and its Industries. It would enhance cargo importance in UK and strengthens its economy.
He said that Heathrow would start with improvements in freight procedure and study its infrastructural changes. Two and half years since Sir Howard Davies was hired to lead the research into the good way to enhance the UK’s airport capacity. However this approval contains many limitations such as curbs on noise, night time prohibitions between 11-30pm to 6am, no increase in capacity, a guarantee on air quality and providing of opportunities to native communities.

A lack of political support will remains a danger for UK’s aviation region. According to Heathrow administration that London airport is not happy and there is no winning attitude here. Heathrow’s policy is not against to add another new runway at Gatwick as well but it urged that it is right for UK’s economy.

Heathrow Airport

The freight community’s desired decision of a new north-west runway at LHR was selected. Economic benefits and trade of UK are clear but the fact that UK has not been able to settle on this matter since the 1970s says its own story. Heathrow airport is air cargo hub for the trade with the world and it is the backbone of UK economy as well.

Director of Global and European policy said that Heathrow is able to meet the demands of importers and exporters to increase the connections with the markets of the world. Extra capacity of Heathrow is precarious to permit the freighters to enter into new and emerging markets in Asia, South America and Indian sub-continent.

The Author is working with Pakistancargo4u.co.uk. For cheapest air cargo to Pakistan services, check out their official website now.