Over the last years, the Asia Pacific (APAC) region has served as a significant manufacturing hub due to the presence of the world’s largest manufacturing economies, including China, India, Southeast Asia, South Korea, and Japan.
Asia is also home to nearly 60% of the world’s population and 60% of its youth, making it a robust workforce source for the foreseeable future.
With 42 dedicated freighters flying to Asia per week, as well as belly capacity in 120+ weekly passenger flights, Lufthansa Cargo has recognised the growing potential of the APAC market.
“Airfreight operations play a crucial role as they are not only the fastest but also sometimes the most cost-effective means of transport, particularly for high-value items of relatively small weight and size,” J. Florian Pfaff, Vice President APAC of Lufthansa Cargo AG, said.
According to IATA, the APAC region holds about 32% of the world’s air cargo market share. Year on year, Europe-Asia air cargo volumes increased by 3.2% in 2023.
As more companies move their manufacturing to Asia and source their supplies from there, Asia becomes an increasingly important hub for cargo operations.
This trend has persisted for some time and has been exacerbated during the COVID-19 pandemic because of disruptions in the supply chain and logistics.
If the APAC region were a single country, it would rank as the third most populous nation with a significant proportion of young people.
“European and American companies are looking to diversify their supply chains, so they frequently move their manufacturing operations to Southeast Asia. As a result, this region has become a prominent foreign direct investment destination in Asia,” Pfaff added.
Manufacturing on the move
As a large percentage of manufacturing takes place in Asia, the primary cargo segments differ depending on the country.
Generally, the key segments consist of semiconductors, pharmaceuticals, automobiles, and electronics originating from Asia.
Additionally, e-commerce shipments have experienced significant growth in recent times.
“Lufthansa Cargo has had a presence in Asia for over 50 years and remains a significant player in the air cargo industry, Pfaff highlighted. “As the demand for air cargo grows and our cargo fleet expands, we are continuously seeking out opportunities for expansion in Asia.”
“More cargo capacity will also be increased through greater belly capacity resulting from the addition and introduction of new passenger routes by Lufthansa in Asia,” Pfaff continued. “This includes new passenger flights on the Munich-Bengaluru route in November and the Frankfurt- Hyderabad route beginning in 2024.”