David Warrilow attended the 2nd China Summit in Shanghai in April 2006 and chaired two round tables on the air cargo industry.

The two big subjects raised at the round tables were capacity and security. With a shortage of capacity already biting, there could be no end in sight to the threat of higher costs, Warrilow warned.

Although he was expecting to see a 20% increase in passenger flights out of China in the coming years, cargo availability on these flight would be less than this increase - despite demand for cargo capacity expected to rise by more than 20% .

The alternatives to using passenger flights - the most popular method for the global logistics industry, because they are predictable for more than a year in advance and provide the lowest freight costs - were scheduled flights and charters. Scheduled flights were cheaper than charters but not as regular as passenger flights.

"So far, air cargo transport out of China has been quite cheap but I can't see that lasting," Warrilow said. "Higher freight costs could be offset by improving performance in the delivery pipeline - an area not yet touched on by most 3PLs."

On security, the main issue raised was that Homeland Security in several countries had raised the bar on what was expected of global logistics companies. The additional demands were over above what the industry was familiar with and that meant it had to adapt.

Measurement of freight - from export gateway, through bulk break to the final customer, to give complete visibility in the delivery pipeline - was one way that some of the new demands could be met, Warrilow commented.

The summit, organized by Eye For Transport, focused on:

  • best practices for transport and logistics operations in China
  • developing relationships with local or international companies
  • advice to ensure a successful Joint-Venture
  • essential tips for working with national and local Government
  • current infrastructure for ocean, air, road and rail networks
  • updates on logistics parks, airport and oceanport expansion
  • trends in value-added services that can give you and your customers a much-needed competitive edge
  • new opportunities and challenges (strategic, geographic, technological) in this key marketplace