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Asian air cargo carriers are reporting a sharp decline in demand that could become even more steep if the U.S. follows through on threats to place higher tariffs on Chinese-made goods. Coupled with this is a drop off in intra-Asia cargo volumes, as components exported to China for assembly lines declined due to decreased production levels.
The trade war has also resulted in uncertainty and concerns over tariffs, leading to some manufacturing activities moving from China to other countries, such as Vietnam, Thailand and Malaysia. This is, however, a slow process as supply chains cannot adjust that quickly. While this may boost cargo volumes in the region, retaliatory tariffs by the U.S. against these nations will have negative effects on cargo volume.
For more information, contact David Lychek, Manager – Ocean & Air Services.
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