Airfreight market set to get worse before it gets better for buyers

Buyers of airfreight capacity should expect the market to get worse before it gets better, according to Bruce Chan, vice president of global logistics at investment bank Stifel. Chan said that belly capacity is not expected to return until 2023 at the earliest. And while rates are expected to ease from their current elevated levels faster than the return of capacity, space shortages in the immediate future are likely to push prices up this year.
Chan said: “Does that mean rates will stay this high until 2024? Unlikely, in our view. But there are structural factors that may keep rates higher than before, including the global rise of e-commerce and the fractalisation of supply chains in search of labour, capacity, and production diversification.
“And several large freight forwarders have now declared air charter to be a permanent part of their service offering—not just peak capacity infill.” However, in the immediate future “we do expect things to get worse before they get better” for those buying air cargo capacity.