Cargo Chat: Dimerco’s Jeffrey Shih on peak season expectations

Although Taiwan-based logistics company Dimerco Express Group narrowly missed appearing in this year’s Power 25 ranking of the top global airfreight forwarders, Dimerco was selected as one of Air Cargo World ’s three forwarders to watch in 2021 due to the company’s historical strength in airfreight forwarding and major restructuring that began in late 2019. The restructure included the organization’s management, with specific members of the executive management board focusing on airfreight, ocean freight and contract logistics. Dimerco also invested in what it calls “business intelligence technology,” which covers such areas as new technology research and innovation, integration of Dimerco’s web and mobile capabilities with its larger systems, and cybersecurity. Although the reorganization occurred less than two years ago, Dimerco’s chief executive management, Jeffrey Shih, said the company is realizing significant productivity gains, with one innovation — robotic process automation — providing a productivity improvement in time savings of more than 97%. [caption id="attachment_96272" align="alignright" width="300"] Jeffrey Shih, Chief Executive Management, Dimerco Express Group[/caption] Air Cargo World spoke with Shih to learn how the company is leveraging its strengths in technology and cross-border service despite lower global airfreight capacity, and what Shih expects for the upcoming peak season since the return of passenger belly space to 2019 levels by 2022 looks increasingly unlikely. Air Cargo World: While Dimerco’s ocean and air shipments were down year over year in tonnage for 2020, the numbers of air and ocean brokerage shipments were up YoY. To what do you attribute the strength in your brokerage business? Jeffrey Shih: At the end of the previous year, we got the Advanced AEO [Authorized Economic Operator] certification, and in China that is a very high standard requirement. In order for us to streamline the input process with customs brokerage in China, the broker or freight forwarder has to be certified by the AEO. So China has been one of our home bases for over 30 years, with our executive over nearly 80 branch offices, so that’s one contributor in terms of brokerage. Besides that, in Asian countries such as Indonesia, Thailand, Philippines, Malaysia or even Singapore, because [when we handle cross-border business there], we are also doing the brokerage business for them, in order to provide the simplest service quality. Since two years ago, there’s been trade tension between China and the U.S. We have our own brokerage department and they’ve been doing the job for us in the past, so that’s why overall we see the brokerage business increase. The other one is, particularly in Indonesia, because that’s one of the e-commerce service areas, we’ve been a provider to one of the very large consumer electronics customers, and our system links directly with the customer in Indonesia because we are the only one approved by the local authority. ACW: Now that we're nearly halfway through 2021, how is airfreight tonnage comparing to 2020 so far? JS: Based on the first five months, the number increased more than 20% for airfreight tonnage. And then, of course, to compare, the first quarter of last year was worse for this quarter because the first quarter was before COVID-19. And as you know, COVID-19 started in China and that is our home base. So if we only compare the first quarter, last year was actually very slow in terms of the first quarter, but this year, because they're continuing with COVID-19, we see that over 20% to 25% increase. ACW: And what are your expectations for the rest of the year as we move into the peak season? JS: A lot of the airline terminals in the U.S. are very congested, including Los Angeles (LAX), San Francisco (SFO), Chicago (ORD) and New York (JFK). One of the reasons for that is because the ocean is coming to the peak season, and because of the congestion in the ports caused a lot of delays, you see a lot of the freight convert from ocean to airfreight. Now we are in the summer, which is usually a little bit slow, but we anticipate in late August or the beginning of September, you will see the peak season coming up especially for the consumer electronics — the new Apple product may be launched somewhere around September, and we also heard Sony is already searching for more than 200 747 charters for [Playstation shipments for] the coming season, before the Black Friday or Christmas sales. We will see significant congestion, no matter whether for ocean freight or airfreight. I think the other side is, currently because of COVID-19, the passenger flight bellyhold recovered, I think, just 30% to 40%. So we will see that demand is more than supply because those 60% to 70% of the belly flight [capacity] won't come back this year.

Cargo Chat: Dimerco’s Jeffrey Shih on peak season expectations

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