“China+1” reshoring trend could provide a fillip for air freight

Air freight can benefit from the infrastructure and resources of the countries as the trend of corporations moving away from China is accelerating.

After supply chain disruptions from Covid and trade tensions between China and the US, Western corporations have shown efforts to shift production bases out of China, with Vietnam as the top destination for the “China+1” model.

According to a European shipper: “Re-shoring is very definitely happening. But with this a fairly recent phenomena, Vietnam has not had time to build adequate infrastructure for logistics facilities like ports, and with new companies pouring in, it’s very much hitting the overflow mark.”

This unit also added that, some shippers are looking for alternatives in the region such as Thailand, Laos and even Myanmar are also considered.

On the other side of the hemisphere, Mexico is also the beneficiary of the US-China trade war, although some sources are exaggerating that China will retain the leading position.

Regardless, this source also added: “Long-term, I think reshoring will become as pronounced as the hype, and countries will get wise to this and meet the demand. But short-term, I believe the strain on existing infrastructure will be a boon for airfreight.

There are international companies looking at Vietnam, but so are Chinese companies that want to avoid being embroiled in geopolitical issues. And when there a problems sourcing capacity through ports and by ocean, we see air willing to step into the breach with shippers willing to pay for this."

There is an area of Vietnam that is approaching full capacity, which is Deep C Hai Phong II Industrial, which can be further expanded by sea filling.

This, though, would not be a quick process – particularly given Vietnamese bureaucracy.

Source: https://theloadstar.com/china1-reshoring-trend-could-provide-a-fillip-for-air-freight/

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