China airfreight rates fluctuate dramatically

Recognising the massive growth potential on the China-South Africa route, the airfreight division of independent consolidator CFR Freight has launched an aggressive drive to expand its share of the market. Evidence of this was the arrival in South Africa earlier this month of managing director of Far East agent NAC Asia, Christos Spyrou, who is also chairman of the company’s international agency network, the Air Cargo Group, of which CFR is a board member. Spyrou was in South Africa for a week-long sales visit to Johannesburg, Cape Town and Durban. CFR currently offers airfreight services out of 12 Chinese origins – and NAC has offices in all of those origin cities, general manager – airfreight, Dave Graham, told FTW. It’s a true supply and demand market, says Graham, with capacity tending to be almost a commodity and rates fluctuating dramatically. SA importers don’t understand the concept of rates fluctuating on a daily or weekly basis but that’s what we deal with. The Chinese tend to be very focused on their big export markets – being Europe and the US – and don’t understand the SA market need for rate stability. “For us we’re in the fortunate position of having a very good agent with a good line of communication. We try to tackle new business in a two-pronged manner. We target the importer on this side and will put NAC in contact with the exporting forwarder on the other side, a system that tends to work very well. “We believe it’s vital that both sides are talking to each other and talking the same language.” An additional advantage is NAC’s capacity agreements with preferred carriers in Asia, says Graham. “Although the lane is extremely prone to capacity shortages we hold our own because of these capacity agreements that are able to see us through peak demand like the World Cup.” According to Graham the Chinese route has shown better signs of stabilising in the past few months than the likes of Europe and the US. “China was very heavily hit by the volcano because a lot of cargo is transhipped in Europe. It was also massively impacted by the World Cup because everything from soccer jerseys to plastic toys was coming out of China. But China was also the origin that seemed to recover first – just in time for the start of the traditional year-end peak season. “In a nutshell, it’s a lane in which we are investing, in which NAC is investing and where we expect to see significant growth in the year ahead.”