Air cargo outlook remains bright for fourth quarter
With a strong presence in the global airfreight market, and an array of expedited import and export services through our subsidiary Davies Turner Air Cargo, we were pleased to read that the air cargo industry should expect a strong fourth quarter peak season despite lower first quarter volumes as airlines respond to surging passenger demand, according to Brandon Fried, Executive Director, Airforwarders Association(AfA).
According to World ACD, global air cargo chargeable weight flown in Q1 2023 was down 11 percent compared with a year earlier, but Fried attributes recent lower volumes to post-Covid normalization rather than decline.
“We’re coming down from the lofty volumes seen during the pandemic, which we all know were not sustainable long term, but we’re not crashing, we’re normalizing,” said Fried, speaking on The Loadstar’s Big Air Cargo Debate podcast.
“We need to be bullish in the second half; consumers are still out there spending and passengers are flying.”
Regionally, overall tonnage in the first quarter of 2023 dropped by 16 percent for Asia Pacific and 18 percent for North America.
Some economists predict a fully-fledged US recession later this year, but Fried remains optimistic for the return of higher cargo volumes in line with end-of-year peak season.
Current freight rates are artificially lower than supply and demand would dictate because airlines are operating more aircraft than necessary in anticipation of an uptick, he said, and to accommodate swathes of passengers waiting to fly.
“This will benefit freight forwarders in the long run because airlines want to tailor pricing to attract business,” said Fried.
“It also indicates a departure away from the traditional freighters we saw during the pandemic, and we can expect some of the older freighters to be phased out.
“Now’s the time for freight forwarders to really show their creative strength because they have to anticipate what’s coming around the corner.”
Fried urged the same fighting spirit to contend with ongoing labour shortages and union negotiations, which have been casting a shadow over US supply chains and impacting global trade flows.
“It’s time for the freight forwarders to be the creative logistical problem solvers that we are – we’ve got to be ready for a challenging future,” said Fried.
Looking ahead to 2024, air and ocean freight demand are set to improve, he concluded.
“We have a new baseline, and we need to stop comparing to before the pandemic.
“It’s a new world, we’re seeing a new geopolitical order: the war in Ukraine, rising labour costs, Chinese manufacturers moving out of China to elsewhere in Asia, South America, and Mexico.
“Manufacturers are diversifying, and we can expect to see regionalizing of supply chains in the US and globally.
“A different political structure will have a significant impact on supply chains.”
In the IATA/CASS league table for 2020, Davies Turner Air Cargo was the UK’s highest placed independent freight forwarder, measured by CASS airline tonnage. As such, you can be assured that our experienced staff are always on hand to provide support as you negotiate the tricky air cargo market.
For more information about the Davies Turner group’s global air freight forwarding and logistics services, please contact aircargo@daviesturner.co.uk or visit https://www.daviesturner.com/air-freight
Air cargo outlook remains bright for fourth quarter
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