Cathay Cargo signalled optimism for better months ahead as it gave an update on its operations so far this year.
Fred Ruggiero, vice president of Cargo, Americas, noted that this year so far, volumes ex-North America have been holding up and most of Cathay's stations across the Americas — and beyond — are "busy".
"That said, we started the year quietly: mainly because of a slow return to work on the Chinese Mainland after pandemic restrictions and the Lunar New Year holiday impacted demand," he said in an update on March 31.
Nonetheless, Ruggiero noted that nonetheless, factories are currently retooling and gearing up again, and this is reflected in the 9% growth in tonnage in February over January across the overall Cathay Cargo network.
Better Q2 expected
"It's a slow climb after a weak peak and the start of the year, but in March, we are seeing evidence of further growth in both imports and exports," the VP of Cargo, Americas, said.
"Looking further ahead, the second quarter is going to look a lot better than the first, and the third should look better still," he added.
Having said that, Ruggiero warned that "there are still some conflicting signals" in the market.
"We're told that inventory levels are high in the US, but it doesn't seem to be affecting retail behaviour too much from our position," he said. "In fact, some retail commodities are flat-out unavailable — it can take up to six months to buy an electric vehicle now, for example."
Conflicting signals
"It's a confusing picture, and we try to make sense of it in this piece that outlines some of the economic factors that are influencing demand and analyses the changes to supply chains after the pandemic," Ruggiero added.
Meanwhile, he said that one commodity that is certainly continuing to perform is perishables, and one region where this is especially strong in South America.
"While the current inflationary environment affects food prices, our experience is that people in Asia appreciate the quality of Latin American produce, and demand is, therefore, still growing," Ruggiero further said, adding that over the past six or seven years, Cathay Cargo has worked hard to link up shippers from South America, Latin America and the Caribbean with Asia.
"It's worked well, to the extent that we are now the biggest air cargo carrier out of South America to Asia — and we don't even fly to South America!"
Ruggiero noted that, for example, the Miami-based team channels air cargo to its Cathay Cargo stations and onto Hong Kong using a network of interline connectivity.
Ruggiero also reported on some of the innovation progress of Cathay Cargo.
For one, he pointed out that Cathay Cargo's Click & Ship booking platform — which is now responsible for 70% or more of Cathay Cargo's bookings in some markets — is being upgraded to include batch bookings.
"We have also been refreshing and developing our specialist customer solutions. This month will see a new solution for our post office customers, Cathay Mail," the Cathay Cargo VP for Americas added.
"And as our network rebuilds, we are, as a Group, on target to have 50% of our pre-pandemic passenger capacity operating at the end of March — considerably boosting the value of our bespoke, priority service Cathay Courier," Ruggiero added.