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Issue 69, October 29, 2009
Effective 01st November 2009 - China/Korea/Hong Kong, Including China South
DHL Global Forwarding appreciates the confidence you place in us as your global supply chain partner. We strive to provide our customers with world class service throughout periods of peak demand, as well as when market conditions are less challenging. This has never been truer than today as our customers are experiencing few, if any, disruptions to their supply chains in spite of unprecedented challenges in the trans-pacific airfreight market.
Increasing demand, declining supply
In response to the precipitous decline in airfreight prices, the transpacific air carriers sustained heavy financial losses in the first half of the year. The International Air Transport Association (IATA) has projected air carrier losses at $11 billion USD for 2009. The carriers response to this crisis was to decrease their operating capacity and to date, 227 freighters have been taken out of the “in-service” fleet, and capacity on the trans-pacific is at pre-1995 levels.
Following the severe downturn from November 2008 through April 2009, market demand began to recover in May of 2009. Since that time we have witnessed steady increases in demand and today, the market is very near full recovery.
This combination of market recovery and capacity reductions has created severe backlog situations throughout the pacific. DHL’s market leading position serves us, and our customers, well during such challenging periods as we’ve been able to acquire adequate air space to keep our customer’s supply chains moving reliably. However, the price of acquiring air space has gone up tremendously.
General Rate Increase
The affect in China, Hong Kong, Taiwan, and Korea has been particularly acute. For these markets, DHL Global Forwarding will be forced to pass on the additional costs incurred from the airlines in the form of a General Rate Increase (GRI) effective November 1st.
We are continually monitoring the situation and will continue to provide timely updates of the market. With revenues increasing, our hope is that the carriers will begin re-introducing capacity in 2010 and that this potential increase in supply will temper pricing.
Should you have any questions, please contact your local sales representative for more information.
Sincerely,
Brian Lindholm
CEO, DHL Global Forwarding North America
