Penang air cargo to improve further

After experiencing eight quarters of sluggish business, the Penang air cargo industry expects to see an increase in the volume of outbound and inbound cargo this year.

GEORGE TOWN: After experiencing eight quarters of sluggish business, the Penang air cargo industry expects to see an increase in the volume of outbound and inbound cargo this year.

Penang Freight Forwarders Association (PFFA) honorary secretary-general Ali Ahmad (pic, below) said the association was confident the exported cargo volume would rise by at least 15%, from 67, 911 tonnes in 2020 to 79, 000 tonnes this year.

This is due to the worldwide shortage and surge in the demand for electrical and electronic (E&E) components.

“The imported cargo volume is expected to increase by about 15% from 30, 682 tonnes to 35, 284 tonnes this year, ” he told StarBiz.

Ali said that for the first four months of 2021, PFFA handled 29, 079 tonnes of outbound cargo compared to 19, 962 tonnes handled in 2020, an increase of 31%.

The inbound cargo increased by 14% to 13, 482 tonnes compared to 11, 588 tonnes in the same period of 2020.

“E&E components comprised over 70% of the cargo exported and imported, ” he said.

Meanwhile, the air freight rates to Asian countries, which are badly affected by the Covid-19 coronavirus, have soared by over 300% since January.

“Because of the lockdowns worldwide, airlines have reduced substantially their cargo capacity, triggering air freight rates to shoot up. The rates are now at all-time high.

“The shortage of air cargo space has prompted our customers to use our trucking services to transport their cargo to Singapore from KL International Airport, ” he said.

Depending on the destinations, the current air freight rates from Malaysia to Asian countries range from RM10 to RM15 per kg, while to the United States, the charges could go between RM45 per kg and RM63 per kg.

To Europe, the rate hovers around RM18 to RM25 per kg.

Meanwhile, Pentamaster Corp Bhd chairman C.B. Chuah said the group shipped out more test equipment via air in the second quarter than the preceding period.

”We shipped out 33% more in the second quarter than the first quarter. The pick up should grow stronger in the third and fourth quarters of 2021, ” he added.

Chuah said the global general electronic components market was expected to grow from US$337.12bil (RM1.40 trillion) in 2020 to US$378.68bil (RM1.58 trillion) in 2021 at a compounded annual growth rate (CAGR) of 12.3%.

“The growth is mainly due to the companies rearranging their operations and recovering from the Covid-19 impact, which had earlier led to restrictive containment measures involving social distancing, remote working and the closure of commercial activities that resulted in operational challenges.

“The market is expected to reach US$509.06bil (RM2.12 trillion) in 2025, at an 8% CAGR, ” he said.

About 60% of Pentamaster’s test equipment is shipped via air to customers in the United States, Japan and China.

MMS Ventures CEO T.K. Sia said the group has shipped out 50% to 60% more test equipment to the United States and Europe in the second quarter compared to the first period. “Half of the orders are shipped via air while the remainder by sea, ” he added.

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