Air Cargo Management

Airforwarders Association chief predicts ‘strong’ Q4 peak as airline demand surges

The Airforwarders Association (AfA) has predicted a “strong” traditional Q4 peak for cargo this year as demand among airlines surges.

The prediction same from AfA executive director Brandon Fried speaking on The Loadstar’s Big Air Cargo Debate podcast.

The rebound at the end of the year comes after figures from World ACD showed global air cargo chargeable weight flown in Q1 2023 was down 11% year-on-year.

Fried attributed recent lower volumes to post-Covid normalisation rather than a more longer-term 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.

“We need to be bullish in the second half; consumers are still out there spending and passengers are flying.”

Regionally, overall tonnage in Q1 dropped by 16% for Asia Pacific and 18% for north America.

Despite predictions of a US recession later this year, but Fried said he was optimistic for the return of higher cargo volumes in line with end-of-year peak season.

Current freight rates are thought to be artificially lower than supply and demand would dictate because airlines are operating more aircraft than necessary in anticipation of an uptick in passenger demand.

“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 added. “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 labor costs, Chinese manufacturers moving out of China to elsewhere in Asia, South America, 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.”

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