Business Daily from THE HINDU group of publications
Monday, Jul 17, 2006
Business Daily from THE HINDU group of publications Monday, Jul 17, 2006 |
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Logistics
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Air Cargo Problems of overcapacity
According to China Daily, early signs of overcapacity are visible in China's air freight market, particularly in Shanghai. It is hoped that the problem, created by the massive increase in capacity creation, will be for the short term. The capacity increase is the result not only of the emergence of new joint ventures such as Great Wall Airlines, Shanghai Airlines Cargo and Yangtze River Express but also of expansion by global express companies such as DHL, TNT, UPS, and FedEx. If the overcapacity situation persists, it will lead to a shakeout, observe market watchers, pointing out that the drop in yield will force some operators to fold up operations, leading to a constraint in capacity. A similar situation had earlier occurred in Osaka after overcapacity swamped the booming Japanese market.
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