In the build-up to the Chinese New Year, demand ex-China seemed mixed and unclear in January, with a healthy demand of sea freight but comparatively weaker demand of air cargo, and the remaining February is also expected to show a down, according to the Asian senior executives in forwarding, thought estimates by customers resulted into their optimism of the whole of first quarter.
The build-up for this year’s China’s New Year, that began officially in the last week, didn’t offer a demand rise in air freight as usual, but a stronger performance than expected was given by ocean markets in January, in spite of weak figures of purchasing manager index and concerns regarding weakening Chinese growth, Lloyd’s Loading List.com were informed by DHL Global Forwarding executives.
Holidays for China in the Lunar New Year saw closing down factories at least for a week; however most of them subsequently work or operate with the minimum staff for some period while waiting for their workers to come back from their home villages located in interior provinces. This has traditionally prompted up order rush from buyers who are eager to re-fill and stock inventories for the weeks prior to the festivals.
The senior vice President of air freight, DHL Global Forwarding Asia Pacific, Li Wenjun, informed that the market of air freight had been soft compared to that one year ago because of lower demand, although this year’s China’s New Year came before 2015’s official holiday, which started on February 19.
He informed Lloyd’s Loading List.com that the market rate slightly rose up just before the Chinese New Year because of a volume increase as well as flight cancellations by airlines. He also added that there was no expectation of an immediate acceleration in the demand holiday ends in the next week officially.
According to him, employees are offered longer holidays by manufacturing companies, which leads to lesser output. Hence they expect a weak demand also after the Chinese New Year.
David Goldberg, DHL Global Forwarding Asia Pacific’s senior vice president of ocean freight, informed that in spite of weak figures of purchasing manager index of manufacturing new export orders and outputs for January, ocean volumes had been stronger than expected, in the way up to CNY, across all DHL markets.
Goldberg added that once workers get back to work, in few weeks output will return to the normal levels. He said they expect a pick-up in February end, as soon as production gets rolling again.