NEWS\\\


Asia Pacific continues to lead the world in shrinking air cargo market


With air cargo volumes at their lowest in February 2019 (Chinese New Year!), the month of March was bound to show impressive month-over- month (MoM) figures, but even a large increase of 25% was not enough to save the first quarter of the year. Q1 2019 ended with a year-over-year (YoY) decrease in chargeable weight of 3.1%, according to WorldACD Market Data.


This worldwide average of


-3.1% YoY hides considerable differences between the various regions of the world. WorldACD distinguishes between 6 different regions, which together make for 36 different geographical markets: 6 intra-regional and 30 inter-regional markets. 23 of these 36 markets decreased YoY.


While the Asia Pacific


continues to be the world’s air cargo engine, it has become clear over the past half year that the engine runs much less smoothly than before. Markets within Asia Pacific lost 7.6% YoY in Q1. In the same period, 5 of the 10 markets to/from Asia Pacific also performed below the world average, notably the larger ones Asia Pacific to Europe (-4.9%), Europe to Asia Pacific


Ports, terminals in St. Louis region still tops in efficiency


The latest data from the US Army Corps of Engineers (USACE) reveals the St. Louis Regional Ports held onto the top ranking as the most efficient inland port district* in the nation in terms of tons moved per river mile during 2017, the most recent year for which final numbers are available. The St. Louis region’s barge industry handled 472,400 tons per mile. That was 1.6 times the efficiency of the Port of Pittsburgh, PA, which ranked No. 2 with 286,000 tons per mile. The port of Huntington- Tristate, WV, ranked a distant number 3, moving 95,930 tons per river mile.


Adding to the impressive


showing for the St. Louis region’s ports is the number of port facilities/river terminals within the system. The 70-mile long St. Louis regional port system had the second highest concentration of port facilities per mile of all inland ports, with a port facility per mile ratio of 2.36, falling just a little below Pittsburgh’s 3.14. However, within the 15-mile stretch of St. Louis’ port system known as the Ag Coast of America, the port facility per mile ratio soars to 5.13, far higher than all other inland ports. Those efficiencies translate into an increasingly higher


share of all freight tonnage along the section of the Mississippi River from Minneapolis, Minn., to the Ohio River near Cairo, Ill., being captured by the St. Louis


region’s ports and


river terminals. According to the USACE, the 70-mile St. Louis regional port system represents only 8% of this 855- mile section of the river yet carried 39% of the 2016 freight. “These latest numbers go reinforcing


beyond a key


stretch of our port system as the Ag Coast of America; they underscore the St. Louis region’s critical role in the nation’s freight network,” said Mary


(-4.3%) and North America to Asia Pacific (-4.7%). On the positive side in Q1


(YoY) were the markets Europe to North America (+0.6%), Asia Pacific to Middle East & South Asia (MESA) (+2.9%), Africa to Europe (+2.1%) and intra-MESA (+2.6%), as well as a number of smaller markets. Among the latter, Latin America to Asia Pacific and Africa to North America stood out (both +18%). The largest exporting countries with YoY growth in


Lamie, executive cirector of the St. Louis Regional Freightway. “Continuing investments in the St. Louis region’s ports and river terminals have created a highly competitive shipper and carrier market featuring greater efficiencies and lower costs. We have every reason to believe the positive trends will continue, given the excess capacity at river terminals and high concentrations of barges; exceptional intermodal connectivity; and the region’s unrivaled location in America’s heartland, providing the northernmost ice-free and lock-free


access on the


Mississippi River.” Overall, as of 2017, St. Louis


was the third largest inland port by total tonnage. While the region’s ports and terminals are widely recognized for their role in moving agricultural


Issue 5 2019 - FBJNA


Q1 were India, UK, Australia, Vietnam, Kenya Ecuador, Turkey and Chile, with YoY growth ranging from 0.1% to 6.7%. Except


for Vietnam


and Kenya, growth in these origins was entirely thanks to growth in special cargo, most notably Fish & Seafood. Among the world’s Top-20 air cargo agents, only 4 managed to realize YoY growth in Q1: Expeditors, DSV, Agility and Expolanka. Among the other 16, decreases ranged from 0.2% to 16.4%. Between Q4 2018 and Q1 2019, WorldACD saw a


products, waterborne freight moving through our region is more diversified than the average inland port. As of 2016,


soybeans, corn and


cement were the top three commodities by waterborne tonnage (48% of all tonnage). Looking at just inbound commodities, as of 2016, coal and nitrogen fertilizer were the commodities with the greatest inbound flow by water to St. Louis, accounting for 34%. For the St. Louis region to


continue to maintain its large share of the current freight traffic and capture an even greater portion going forward, the investments by the ports and private industry will need to be augmented by additional infrastructure spending. U.S. Department of Agriculture reports suggest that, without improvements in U.S.


15


worldwide drop in kilograms of 10.3%. The origins North America and MESA suffered least (-3.7%), but Asia Pacific most (-16.8%): China and Hong Kong taken together decreased by more than 20%, double the worldwide drop. Zooming in on Trump’s Trade War, volumes from China to USA fell by 21% between Q4 and Q1, whilst USA to China fell by 12.5%. All in all, those at WorldACD


do not expect the April figures to cause a change in the trend seen so far this year.


infrastructure from the farm to ports, global agricultural market shares will decline dramatically. “Investment in


infrastructure, including improving at-grade rail crossings and increasing efficiency of freight rail interconnectivity with the region’s


Class I railroads,


is key to supporting the barge industry and critical for maintaining global competitiveness,” Lamie said. “Fortunately, public and private funding is already advancing some of the region’s highest priority projects, and the St. Louis Regional Freightway is committed to working with its many partners to advocate for additional funding for others unanimously recognized as vital to modernize the region’s freight infrastructure.”


By Toby Edwards, CEO of Shipa Freight


As ports struggle to cope with an influx of mega-vessels and issues caused by trucking congestion, it’s no surprise that productivity levels are faltering. Tech innovation offers many solutions, but the logistics industry has so far been slow to capitalize on them. Where


tech innovations


are being implemented, the benefits are clear. Southern California ports facing serious congestion problems have been experimenting with automation tools and techniques, such as using ship manifests to forecast arrivals on their websites so


that truckers can plan pickups more precisely. In Europe, the Port of Rotterdam and the Port of Hamburg began using technology last year to share information about planned and actual vessel departure and arrival times between the two ports.


This exchange of real-time


information can improve scheduling and coordination and ensure more efficient use of resources. Ports that successfully implement data- sharing


tools can plan and


deploy labor and equipment when and where it’s needed,


reducing port congestion by improving the flow of cargo. Better forecasting abilities and resource optimization can also bring social and environmental benefits; currently, half of trucks travel empty on their return journey. But despite the innovations


taking place at some ports, the World Economic Forum says that in general, the logistics industry “has introduced digital innovations at a slower pace than some other industries.” While the Internet of Things and the use of Big Data are revolutionizing other industries and becoming embedded in our lives, ports and carriers


are just not testing, adopting and optimizing technology fast enough. Predictive analytics could dramatically ease port congestion and improve efficiency, but this technique is not yet being leveraged successfully. Poor


forecasting


continues to hamper the industry, resulting in regular overbooking and no-show cargo. As the World Economic Forum observes, other industries with close links to logistics — retail, for example — are embracing digital technology. If other sectors can overcome implementation and security challenges, why do ports seem unable to capitalize


on automation and other hugely valuable technologies? In its white paper on the


digitization of the logistics industry, The World Economic Forum predicts that, although adoption in


the industry is


slow, “digital platforms will become increasingly important [...] allowing small companies to have a global reach and compete with the sector’s established giants.” Online freight booking platforms make the process of finding, booking and tracking shipments more efficient: shippers can get quotes and make bookings at any time of day or night; there’s no lag as shippers wait for


multiple providers to get back to them with quotes; documents relating to the shipment can be accessed easily. As trade grows and ships get


bigger, the need for excellent planning and forecasting becomes increasingly important. If forecasting continues to be poor, congestion and inefficiency will continue to thwart port productivity. Happily, for the industry, technology can provide an answer: innovation, automation and real-time information sharing are key. It’s now incumbent on ports and the wider logistics industry to make effective use of them.


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