Apple’s latest product salvo, the iPad3, is due to hit U.S. stores any day now, if the online rumors are to be believed.
The often secretive tech giant hasn’t announced a release date, but airfreight activity in China, where the product is being assembled, suggests the new tablet launch is near.
Taking aside Apple’s supply chain task of distributing to eager global markets, the launch of such an anticipated product can have knock-on effects for other shippers.
American Shipper canvassed opinion on how the iPad3 launch might affect the airfreight market out of China, in terms of capacity and rates. What we heard back was that the product launch will have some short-term effect on shippers who tend not to plan their airfreight movements well in advance.
But we were also told the airfreight market from Asia is soft at the moment, and likely able to absorb such a product launch more easily than in a tight market.
“Air carriers had started to cancel schedules and reduce space available in mid-December,” said George Chien, director of Asia trades for Southern California-based forwarder Dependable AirCargo Express, part of the Southern California-based Dependable group of companies. “The iPad3 releasing has tightened the airspace out of Shanghai and Chongqing. Air shipping cost has gone up by $1 per kg this week, comparing to last week, and left almost no space for other commodities out of these two airports. Out of the rest of China origins, cost has increased mainly due to the rising fuel cost , by around $ 0.50 per kg. However, there is space available.”
Tom Nightingale, president of sales and marketing for ModusLink Global Solutions, said short-term tightness out of key spots in China may affect the ancilliary vendors of Apple accessories the most.
“With large blocks of freight capacity booked to support a launch of this size, there will likely be some spillover capacity tightness for other airfreight users and, for them, space will come at a premium for a short period of time,” he said. “The greater challenge may be for third-party accessory manufacturers that will be scrambling to develop products in support of the iPad 3 and get them to market in time to meet demand.”
But Nightingale said other shippers likely won’t be affected much.
“Most manufacturers will have booked freight capacity well in advance of a significant product launch like the iPad 3,” he said. “The real issue at hand will be less one of capacity and more one of strategically coordinating delivery schedules to hit the launch dates in the targeted channels. This is especially true with a launch outside the peak shipping season in the fall.”
Rather than capacity shortages, shippers may be hit with short-term price spikes.
“While we don’t see a capacity shortage, ad-hoc rates have gone up during the last two weeks from China to the EU and U.S. and it’s expected to remain on this level until the iPad3 launch is over in two weeks’ time or so,” said Lucas Kuehner, managing director for Panalpina USA. “However, then we expect rates to fall back again to previous levels. We reckon this is a short-term phenomenon in a pretty soft market.”
Meanwhile, the consulant Seabury Group said production of tablets, including iPads, is driving airfreight growth out of China.
Source: Seabury. Click chart to view full size.
“If research companies are correct in their expected required production of laptops and tablets, then we may expect to see a doubling of air freight tonnage from China, of which this growth primarily manifests itself through the production of tablets including iPads,” said Marco Bloemen, senior vice president for Seabury Aviation & Aerospace. — Eric Johnson