Automotive slow-down squeezes airfreight volumes

The knock-on effect of the automotive industry slowdown has been particularly toxic for the airfreight industry – and for direct carriers on the SA-South America route it’s been a tale of less cargo and more carriers fighting for it. “We were hit very hard on air cargo because the majority of Sao Paolo exports by air were auto parts and the auto industry had a huge decline,” regional general manager for the Americas, Bill Savage, told FTW. “Year to date volumes out of Brazil are down 31% overall.” Because of the global battle for cargo, airlines that could offer a transhipment option like Turkish Airlines and Emirates went after business that previously had not attracted them, says Savage. “That destroyed the market rates, with almost every shipment a spot shipment. No one is doing regular business any more. We probably lost 40-45% of the yield.” A large proportion of the exports from Buenos Aires and Sao Paolo are destined beyond Johannesburg for the rest of the continent. “We are trying to build on this south-south connection,” he said. Most of this business comprises auto parts, courier parcels, hatching eggs and leather goods and unfinished leather. In terms of South African exports, business to Sao Paolo and Brazil is not huge, says Savage, but it’s steady, mainly perishables. Going into next year Savage is optimistic about the outlook. The automotive industry is likely to start picking up while strengthening ties between South America and Africa will affect growth. And the airline is expecting to support this growth with expanding services. In addition to its Sao Paolo flights SAA launched its Buenos Aires service in May with two flights a week and since July a further frequency has been added. “We are slowly building on that and could add frequencies on both routes in the future.”