Economy

Volcanic ash clouds cargo fate

By LI WENFANG AND LAN TIAN (China Daily)
Updated: 2010-04-22 07:19

Guangzhou - The volcanic ash cloud from Iceland that has cut off much of Europe from the rest of the world is choking the logistics sector of South China's Guangdong province, leaving some export/import dependent businesses playing a waiting game.

"Our company has dozens of tons of cargos that can't be delivered and have been temporarily stocked at Guangzhou Baiyun International Airport or warehouses, as most flights to Europe have been cancelled or postponed," said Liu Shunxiong, a member of the marketing department with the Guangzhou branch of the COSCO International Air Freight Company.

The incident has caused a loss of about 200,000 yuan ($29,300) for the company, said a top State-owned air freight agent specializing in delivering goods, including clothes, shoes, mobile phones, vegetables and fruit.

"We haven't been told when the flights might resume. I think this week, we can do nothing but wait," he said.

"The loss could be much higher for businesses like ours that deal with fresh cargo like fish fries, seafood and flowers, because with a very short quality guarantee period, these goods can only be airlifted to destinations," said Zhang Guangtai, who is in charge of air freight logistics of Sinotrans Guangdong Co Ltd.

"Although flights from Guangzhou to major European cities, including London, Paris and Frankfurt, gradually began to resume on Wednesday, the chaos is far from over, as logistic companies are busy delivering the cargos overstocked since the volcano's eruption," he said.

The Icelandic volcanic eruption last Wednesday has led to an almost complete shutdown of European airspace in the past week, stranding millions of passengers and causing huge losses to the aviation industry. Air carriers were losing $270 million per day due to the disruption, according to the International Air Transport Association.

The Eurocontrol air traffic agency expected just under half of the 27,500 flights over Europe to go ahead on Tuesday, a marked improvement over the last few days. The agency predicted close to normal take-offs by Friday, the Associated Press reported on Wednesday.

But with more than 95,000 flights canceled in the last week, airlines faced the enormous task of working through the backlog to get passengers where they want to go - a challenge that could take days or even weeks, the report said.

Guangdong, a major economic powerhouse in South China, saw more than $153 billion in imports and exports from January to March, accounting for 24.7 percent of the nation's total.

The impact of volcanic ash to international logistics in Guangdong will be "limited", as the majority of the freights' destinations are Southeast Asian countries, said an anonymous source from the Guangdong International Freight Forwarders Association.

Meanwhile, wholesalers and high-end catering services have been left short of some supplies for their businesses.

"Precious cargo has been in short supply in Guangzhou and even in the whole Southeast Asia area," said Dong Shengrong, with a Guangzhou branch of the German wholesale giant Metro Group.

Most guests understand the situation and are willing to accept other food instead of salmon from Norway, which used to be airlifted to the hotel every two days, said Bai Hua, a public relations officer with Guangzhou's Shangri-la Hotel.

Zhang Suyong contributed to the story.

CHINA DAILY

(China Daily 04/22/2010 page6)