Air cargo and logistics heads optimistic about emerging markets

EMERGING markets countries in the Asia Pacific region will be the fastest growing in 2014, a survey of global trade and logistics professionals suggests. 

Of the 800 executives who contributed to global logistics company Agility’s annual Emerging Markets Logistics Index, now in its fifth year, 58 per cent believe that Asia’s rebound-ing expansion in the retail/consumer, hi-tech and automotive goods sectors will outstrip progress in other new regions and and stimulate air cargo growth. 
Overall 74 per cent of the managers remain optimistic about the prospects of emerging markets despite signs that growth is slowing in China, has stalled in Brazil and India, and is uncertain in other countries that could suffer, if the USA ‘reins in monetary stimulus [quantitative easing (QE)]’, the report shows.

It also revealed no country can challenge China’s commanding position as the leading trade lane in both air and ocean freight. However, its air cargo volumes to the USA fell by 7.5 per cent in 2013. 

Among the top 10 largest trade lanes, the biggest volume gains were Colombia-US, Chile-US and Bangladesh-EU. The world’s most populous nation also remained the dominant destination for air cargo from the US and EU. 

The index, a collaboration between Agility and global research firm Transport Intelligence, ranks 45 major emerging markets and identifies factors that make them attractive for investment.

Essa Al-Saleh, president and chief executive of Agility, states: “The industry’s confidence in emerging markets shows that logistics executives take a long view and see beyond today’s headlines. In the past, currency pressures, investor jitters, political instability or a pause in growth was a major setback that undermined confidence about other emerging markets. This time, the industry is staying focused on their enormous potential.” 

Echoing his comments, John Manners-Bell, chief executive of Transport Intelligence, observes: “Not only does the majority of the world’s population reside in emerging markets, but these markets offer expanding middle classes and a younger average age compared to the more developed markets of the USA and Europe.”

He warns: “The need to meet the rising needs of these markets is a great opportunity for logistics providers, but it will also prove a bumpy process as economic, political and other risks will need to be navigated carefully.”