high-tech


GLOBAL HIGH-TECH industry traffic may be dominated by export volumes out of Asia but it is not the only business available to air cargo carriers and other service providers. Prominent Irish air


cargo GSSA International Airline Marketing (IAM), for example, works with several forwarders and its


McCool: “We are noticing more imports … coming in from China each month”


principal airlines on two-way high- tech product movements between Ireland and China. “We move daily shipments


of computer parts from Ireland and China,” explains managing director Ian McCool. “Those products are reworked and then sent back to Ireland for testing before being exported to final customers. The total Ireland/China/ Ireland process all takes place in 8-9 days.”


changes in the modal options used by high-tech product manufacturers to get their products to other parts of the world. “I think recession did force many high-tech manufacturers which traditionally depended on air freight to build a supply chain with higher inventory levels at destination points and longer lead times, which allowed them to use ocean freight,” commented Asok Kumar, vice president sales and key account management for Schenker (Asia Pacific). “It is quite clear that a fair amount of that volume will


not return to air because a different supply chain has been built, based on an ocean solution, and is running well. The manufacturers are not going to quickly revert back to air.” Sou Ping Chee, director air freight, Asia Pacific, for Ceva


Logistics, notes that the post-recession “very sharp and unexpected spike” in air freight rates towards the end of 2009, which has continued through to the middle of this year, might have had a bigger impact on high-tech product manufacturers’ thinking than the recession itself. “We have heard from many manufacturers that their transportation budget busted badly and I think that has forced some of them to look at alternatives (to air) transportation,” Chee said. “We know that some of them are looking into sea- air and other ways they could reduce their dependence on air freight. But I think it is too early to tell whether those considerations will have a permanent effect on the industry. Looking at the market right now, it is still a case of business as usual.”


SWITCHING MODES Thomas Cullen, chief analyst with UK-based global logistics industry research and analysis company Transport Intelligence, believes it does appear that some high-tech manufacturers are more willing to switch from air to sea freight once a new product is established. Talking recently to the CEO of a major global forwarder


McCool said that while global


recession and the departure of some manufacturing operations from Ireland over the last few years has hit the country’s high- tech product volumes, it has more recently seen some new expansion of production facilities. “That is starting to make an


impact on import volumes,” he observed. “We are noticing more imports of IT raw materials, in particular, as well as finished IT products, coming in from China each month.”


and logistics provider, he said that after a new product has been launched using air freight to get it into the market, there is now often a comparatively faster migration (by high-tech product companies) to container shipping transport. “Here we are talking particularly about consumer electronics,” he said. One recession-related change – or rather, non-change


– in high-tech industry patterns of activity which would appear to be positive for the air freight/air express sector, suggest industry sources, has been a stalling of any large- scale move to relocate some production activities from China and other parts of Asia to Eastern/Central Europe, so-called ‘nearsourcing’. According to Joris Oudenhuijzen, global industry


director electronics for TNT Express: “Before the recession we saw some (high-tech) customers talking about moving part of their production back to Eastern Europe, for instance, because of the high air freight rates out of Asia at that time and also to get closer to the market and have more flexibility. “However, the recession really brought that to an end. Personally I would question whether that would have worked anyway. But due to the economic crisis, air freight rates went down and volumes dropped so the business case for moving production back to Europe became a difficult one.” Within Asia itself, while


Oudenhuijzen says TNT will “continue to watch the situation closely”


China still dominates the market, there are clear signs that high-tech product manufacturers are relocating or opening up additional


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