Saturday, July 20, 2024
Market upswing boosting the land of the rising sun

Market upswing boosting the land of the rising sun

Japan’s air cargo industry is well positioned for a good year with Japan Airlines (JAL) signaling the recent upswing in the market looks set to remain.

There are some quirks in this. “It is expected more especially for international cargo due to high demand as far as with the result of first quarter of FY2017,” Japan Airlines assistant manager of the cargo & mail administration department, Kensuke Tsuchida tells Air Cargo Week (ACW).

In the last financial year which for JAL is April 2016 to March 2017 it moved 321,461 tonnes of international cargo and 36,458 tonnes of international mail.

Its domestic operations were also still lively posting 390,677 tonnes of domestic cargo and 31,948 tonnes of domestic mail.

Japan Airlines financial results don’t offer a direct comparison, but 2016 was better than 2015. When measured by ton-kilometres – the amount of cargo transported by the distance flown (km) – there is a 7.6 per cent increase to 2,245,659 ton-km from 2,087,791 ton –km (thousands-km).

It is though weighted towards international cargo which last year was 109.5 per cent of the previous years total whilst domestic hung on in there at 98.5 per cent of the 2015 volume.

Support for this comes from Japan’s other carrier, All Nippon Airways (ANA) who politely were not available to give an interview to ACW.

According to their ANA’s results they moved 72,811.5 tonnes and 70,102.9 tonnes of international cargo in April and May respectively that is 116.2 per cent of April and 113.1 per cent of May last year. Domestically it moved 39,240.3 tonnes and 34,780.1 for the same two months 102 per cent and 105 per cent of the same two  months last year.

Driving growth at JAL is the usual mix with one slight change. “Auto parts and electronic components from Japan to North America and Asia have pull demand.

“The demand of precision machinery from Asia to North America has also been increased,” says Tsuchida.

“(The) major parts of the commodities have not been changed, but sometimes we have specific commodity such as electronic cigarette.”

Whilst many a non-smoker, and member of the health police might wish to see that trade come to end – JAL has decided to end another one of its own accord: short-nosed dogs, 23 breeds of them.

Before suspending movement of this type of dog it had already suspended handling of French Bulldogs and Bulldogs throughout the year from the view point of safe transportation.

However it felt it could not  exclude the same risks for other short-nosed dog breeds and decided to expand the handling suspension, explaines Tsuchida.

Such a move though does not dampen its outlook on the coming year. “For outbound, we expect it to be going strong mainly with the demand of auto parts.

“For inbound on the other hand, demand from Asia to Japan, North America and Europe seems to be kept well steadily,” says Tsuchida. “We expect it to be steady for domestic cargo and mail,” he adds.

Growth as they expect will not force a rethink of strategy. There are no plans for a freighter and JAL’s plan going forward is to increase volumes and maximise revenues by enhancing revenue management, capture mail and express shipments, whose growth is expected to continue, by optimising the advantages of Tokyo Haneda Airport and JAL CARGO’s high quality, Tsuchida explains.

“Regarding value-added shipments, we will maximise revenue by promoting sales of our new constant temperature container (CC20) and vehicle transport services introduced in FY2015, in addition to promoting outbound shipments of agricultural and marine products.  Jupiter Global Limited (JPT) will also play a strategic role to increase use of JAL flights,” he explains.

Temperature-controlled services are import in this and in more ways that would first appear. Not only is there the motor of the perishables and pharmaceuticals industry to think on and respond to nearby China offers a huge potential market.

For the time being though JAL is taking a cautious approach. “We have just launched the new type of container ‘CC5’, which could keep inside between two and eight Degrees celsius. Just like the current type ‘CC20’, Vacuum Insulated Panel (VIP) is arranged on all six sides inside to achieve high performance temperature control and a temperature logger with GPS is loaded for its condition to be monitored.

“We hope more customers would be interested in the series of our special container.”

Also on the cards to develop and meet demand on its international network, JAL will launch non-stop services from Tokyo Narita International Airport to Melbourne and Kona in September.

And whilst the Japanese economy is picking up the de-facto national carrier is keeping a watchful eye on rest of the world and the risks it might run such as currency turbulence.

“Rapid changes of currency exchange rate will impact our revenue which is based on the Japanese Yen since half of our international cargo and almost all of our international mail are sold in foreign currency,” explains Tsuchida.

Picture of James Graham

James Graham

James Graham is an award-winning transport media journalist with a long background in the commercial freight sector, including commercial aviation and the aviation supply chain. He was the initial Air Cargo Week journalist and retuned later for a stint as editor. He continues his association as editor of the monthly supplements. He has reported for the newspaper from global locations as well as the UK.


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