Cargo commerce routes are altering amid commerce struggle, says SATS CEO

A reconfiguration of cargo routes is underway as the trade war between the U.S. and China spills over globally, a logistics industry executive said on Friday.

“We’ve definitely seen an impact in certain trade routes,” said Alex Hungate, president and CEO of airport ground-handler and catering solutions provider SATS.

While there are “strong flows” between countries in the Association of Southeast Asian Nations and China, trade volumes in Greater China — which includes mainland China, Hong Kong, Macau and Taiwan — are “softer,” Hungate told CNBC’s “Squawk Box.”

Listed on the Singapore Exchange, SATS operates in over 60 locations and 13 countries across Asia and the Middle East.

Overall, Greater China would be the most sensitive to the trade fracas, said Hungate.

Where air freight is concerned, Vietnam is a strong performer while trading hub Singapore is “holding up pretty well,” he said, adding that growth in India is also strong.

Hungate confirmed the phenomenon of “front-loading” — where exporters benefit from increased orders before tariffs hit — as he witnessed 300 Harley-Davidson bikes lined up at a freight terminal for shipping.

In October, Harley-Davidson Chief Financial Officer John Olin said the American motorcycle manufacturer was expecting to pay at least an additional $40 million this year to cover the costs of new tariffs across the world. Harley-Davidson is doing everything it can to minimize the impact of tariffs on its profits, he said.

Markets are now keeping their eyes on a much-touted meeting later this month between U.S. President Donald Trump and China President Xi Jinping at the G-20 in Buenos Aires, Argentina for any signs of easing tensions in the trade war.

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