Being an airfreight forwarder in Taiwan must be like shooting fish in a barrel at the moment, given the high levels of demand for semiconductor and AI-related shipments.
Figures released by Taiwan’s Ministry of Finance show that exports of electronic integrated circuits rose 52.3% year on year in July to $26.3bn.
Kathy Liu, vice president, global sales and marketing at Taiwan-headquartered Dimerco Express Group, confirms that volumes have boomed this year.
In the first quarter, the company’s airfreight volumes increased by 20% year on year, with high-tech, semiconductor and AI infrastructure-related supply chains identified as key growth drivers.
Given the rapid growth of the sector, Liu says Dimerco is working closely with customers to understand their requirements.
“This kind of product always needs a white-glove service until it reaches the data centre,” she explains. “It requires very detailed management and they are very high value so it always requires a lot of professionalism.”
But AI-related demand is not the only factor driving volume growth.
The increase in demand during the first quarter also reflects the continued shift towards China+1 strategies, regional manufacturing diversification and multi-location sourcing models, all of which are generating greater demand for cross-regional logistics.
Asked whether the shift of production from China to Southeast Asia has eased following the reduction in US tariffs on Chinese goods, which last year peaked at more than 130%, Liu tells Air Cargo News that the trend is continuing.
“It will continue because the labour cost in China is gradually increasing – it cannot compare with 10-20 years ago,” she says.
“So for those low-value or labour-intensive production lines, for sure it will move out and that would have happened even without the tariffs and regulations.”
However, she adds: “For those high-value, high-technology production lines where you need skilled labour, this will remain in China. We even see some of those production lines in that category that have moved out of China and are now switching back.”
Growing pains
The rapid rate of growth is not without its challenges. Liu says Taiwan and other high-growth locations such as Vietnam and Thailand do not have enough airfreight capacity to meet demand during peak periods.
To help manage the shortfall, customers have been turning to sea-air, air-sea and road-air solutions, as well as regional transhipment hubs.
“Last year, when we faced some problems with air capacity out of Vietnam, we flew into Shanghai and then used capacity from there to the US. Vietnam is also very close to Guangzhou so we can truck there and then take a flight to the US.”
Dimerco also manages peak season demand through a charter programme, block space agreements (BSAs) and close relationships with carriers.
Liu adds that the forwarder does not rely too heavily on BSAs so it is not overcommitted during slower periods of the year. Instead, it relies on building close relationships with airlines.
“We have core carriers and with those long-term partners we have access to extra capacity for the peak season,” Liu says.
She explains that other forwarders will “shop around” during slower periods to secure lower prices, only to find it more difficult to access capacity when demand peaks.
Infrastructure in some locations has also struggled to keep pace with the surge in demand. Bangkok’s Suvarnabhumi Airport has this year faced operational delays, with reports that import cargo processing was taking several weeks at points during the year.
Exports have largely been unaffected because the cargo is booked on a specific flight and subject to a fixed cut-off time.
“The facility, the infrastructure, is not really ready for the cargo boom, so they need to catch up quickly,” says Liu.
A lack of digitalisation has compounded the problem, she says. She adds that one customer decided to truck shipments from Shanghai to China to avoid congestion in Bangkok. Manila is another airport to have faced congestion issues this year.
Asked whether such problems could slow the expansion of manufacturing in Southeast Asia, Liu says companies appear unfazed, instead adapting their logistics operations to minimise the impact of congestion.
