Logistics players are expanding their operations between Asia and Latin America, citing growth in trade between the two regions and increasing appetite for fresh produce, electronics and general cargo both ways.
Qatar Airways said its South American network – which covers six freighter destinations – have been “received very well” with a total weekly cargo capacity from the region reaching 950 tonnes.
“There is a huge demand for South American fresh produce in Asia. We are seeing large movements of perishables, general cargo and pharmaceuticals imported and exported to and from South America along with some movements of live animals and high-value items like telecommunication equipment, electronics and other valuable cargo,” Guillaume Halleux, chief officer-cargo, Qatar Airways, told Asia Cargo News.
He added that the majority of the carrier’s trans-Pacific cargo capacity is used by Northeast Asia stations to transport high-tech goods and electronics, while from Southeast Asia, it uses the capacity mainly from Hanoi to Mexico for mobile phones and tablets.
Halleux said e-commerce and online shopping is also driving the company’s volumes on trans-Pacific routes.
The carrier launched freighters to Sao Paulo, Buenos Aires and Quito in February 2017 and, in January 2021, it will complete its first year of freighter operations to Campinas, Brazil; Santiago; and Bogotá. Qatar Airways also offers belly capacity on its passenger flights to and from Sao Paulo.
“These services have been received very well,” Halleux told Asia Cargo News. “In terms of volume, if we look at cargo tonnage transported throughout our network over the past 11 months, we have flown close to 20,000 tonnes from Asia to Latin America.”
With the onslaught of the coronavirus pandemic causing a major halt in passenger plane operations worldwide, Halleux said trade between Asia and Latin America has continued to expand – although with a limited capacity, prompting operators to resort to flying freighters and all-cargo services to sustain the logistics chain.
“The business has continued to grow even during Covid-19 where our scheduled freighters and charters have been operating to and from South America transporting essential cargo and perishables,” the Qatar Airways Cargo executive said.
“It was, no doubt, challenging to accommodate demand when the bellyhold capacity was reduced drastically, but we continued to fly our freighters on the route, operating charters and even introduced passenger freighters to ensure global trade continuity,” he added.
Asian carriers were more affected because their network is predominantly international and the border restrictions had a severe impact on their schedule integrity, according to Halleux.
For Qatar Airways, the company has continued its operations between Asia and Latin America as it pursues its ambition to be the “carrier of first choice” for its clients – which, he said, means offering a network that is diverse and “accepting that certain routes which consume greater block hours for lower profitability” are needed to support customers.
Moving forward, he said, Qatar Airways “will further expand its network and frequencies” as well as consider all “new opportunities on their relative merits.”
Halleux says the carrier remains “open” to novel and new ideas.
Sea connectivity between Asia-Latin America
A spokesperson from Hapag Lloyd also cited growing volume between Asia and Latin America.
The German shipping company said its service mostly carries auto parts, electronics and general department store merchandise to South America West Coast, South America East Coast, the Caribbean and Mexico from Asia, while from Latin America, reefer cargo mainly consists of meat and fresh fruit products bound for China through Southeast Asia and Northeast Asia.
“Demand in Latin America remains very high, and thus vessels ex-Asia are chock-a-block full,” the Hapag Lloyd spokesperson told Asia Cargo News.
With the widespread impact of the coronavirus, Hapag Lloyd saw demand reduced between the regions, but nonetheless is expected to quickly recover as shippers stockpile on orders ahead of the Chinese New Year in February 2021.
“Demand was reduced by more than 10%, but with a very rapid and steady recovery at least until Q4,” the spokesperson said. “We do not see demand slowing down prior to Chinese New Year.”
As part of its Asia-Latin America service, Hapag Lloyd also introduced its seasonal “Cherry Express” in anticipation of the demand for the native South American fruit in China moving closer to the Lunar New Year in February.
Hapag Lloyd said its “Cherry Express” service between South America and Asia will start in week 47 and will go until week 2 or 3 next year.
Meanwhile, MSC Mediterranean Shipping Company also launched a similar seasonal service between Asia and South America but for transport of coffee designed to coincide with the overall coffee export season.
MSC said the “coffee express” service will run from Colombia, Costa Rica, Guatemala, Honduras, Nicaragua and Peru, which are among the world’s leading coffee suppliers.
“Demand generates from many different parts of the world, with the US taking the lead in North America, and Germany and Belgium ranking among the biggest importers in Europe,” MSC said in a statement, noting that demand is also increasingly rising in many parts of Asia.
Growing e-commerce between Asia and Latin America
Separately, Cainiao Smart Logistics Network, the logistics arm of the Alibaba Group, said that as Covid-19 changed consumer behaviour, it also accelerated the shift to digital platforms pushing the rise of e-commerce.
“We have experienced a doubling of parcel volume compared to the same time last year. This can be attributed to the growth of B2C businesses in the region as well as the current pandemic,” a Cainiao spokesperson told Asia Cargo News, noting that there is an increase in Latin America consumers who are purchasing online since the pandemic.
“Due to the rise in demand, there is a need for us to establish greater air freight stability and shorten delivery time via regular chartered flights,” it added.
For exports from China, the company said the major products are electronic items, daily necessities among others that are sold on e-commerce platforms like AliExpress. Meanwhile, the main imports into China are local produce or commodities such as cherries from Chile.
With volumes between the two regions expected to further expand, Cainiao told Asia Cargo News that it will continue to grow its operations in Latin America.
“We will continue to enhance flight frequency to provide superior service and user experience as business between China and Latin America continues to grow,” the logistics arm of e-commerce behemoth, Alibaba, said.
It said that the continued growth in trade between the two regions could be attributed mainly to rising e-commerce activities.
“We believe that trade between the two regions will continue to grow. With the continuous development of the e-commerce sector, we are confident that it will drive the continued growth in trade; South America is [also] a key market for AliExpress and they continue to invest in the region and accelerate bilateral business growth,” it added.
AliExpress is an online retail service based in China also owned by the Alibaba Group.
By Charlee C. Delavin
Asia Cargo News | Hong Kong