Due to the Chinese New Year, our weekly transpacific airfreight rate update will be postponed until after the holiday.
Long Term Market Outlook: Airfreight volumes are expected to grow up to 4% per year. However, belly space, where much of the needed capacity would come from, is not expected to increase significantly for at least a few years. This means we could see relatively the same rate levels and space squeezes that we are experiencing today extend through to 2024, and maybe even to 2026.
Passenger demand, which is directly related to cargo capacity, is expected to eventually begin growing at a rate of 4-6% but not for at least another three years. It is important to keep in mind that these percentage points relate to passengers, not actual freight space available. Airlines may opt for smaller aircrafts that are not very suitable for cargo, and in such a case, there could be little to no capacity added. On the bright side, aircraft manufacturers are producing more planes better suited for freight, rather than some of the other models currently on the market.
Move beyond five years' time and we expect to see capacity growth that begins to exceed cargo growth. Prior to the pandemic, with a growing population and middle class enjoying international travel, it was hard to believe that we would ever see a day that this was not be the case, but here we are, and full recovery is not expected for 6-10 years.
The good news is that there is light at the end of the tunnel. Cargo volumes are growing, which is a good sign for the economy and, while the rate and space situation is not ideal, we do believe it will remain relatively stable and will only improve over time; albeit slowly.
For over 70 years, Laufer Group International Ltd. has been helping customers improve the way they handle their logistics. To see how we can help, or for any questions, contact Thomas Marano, National Director of Business Development, Ocean Import or contact your local sales representative.