Airfreight operators are being warned to brace themselves for a challenging year ahead, as analysts predict that 2023 could be a bumpy ride for the industry. Despite a slight recovery in the latter part of 2022, the global airfreight market continues to face significant turbulence, with capacity outpacing cargo volumes, according to Wenwen Zhang, an analyst at Xeneta.

Zhang noted that global air cargo capacity had increased for the eleventh consecutive month in February 2023, with an 11% increase compared to the same period in the previous year. However, rates have consistently fallen since 2022, with the global average airfreight spot rate currently at $2.73, a decline of 35% year-on-year. Despite this decline, rates remain 52% higher than pre-Covid levels seen in 2019.

The chief airfreight officer at Xeneta, Niall van de Wouw, emphasized that the air cargo industry needs to acknowledge a new baseline for growth, as rates are unlikely to return to 2019 levels. Van de Wouw urged the industry to shift its focus to where growth is going to come from, given that general air cargo volumes have seen negative growth for the past four years.

Van de Wouw also noted that recent data released by the International Air Transport Association (IATA) for January supports Xeneta’s findings. The data showed that global demand for air cargo, measured in cargo ton-kilometres, fell by 14.9% in January 2023 compared to the same period in the previous year, while capacity increased by 3.9%.

The industry is hoping for a boost in volumes in the third quarter, as companies restock. However, Van de Wouw expressed doubt that this would happen, as many shippers are likely to opt for cheaper modes of transport. This could result in zero overall growth for general air cargo by the end of the year.

The challenges facing the airfreight industry are likely to persist throughout 2023, with the current market conditions not expected to improve significantly. As more capacity comes online in April, the industry will be facing even greater challenges in filling flights. Therefore, airfreight operators need to be prepared to adapt to changing market conditions and focus on finding new areas of growth.

In conclusion, the airfreight industry is facing a bumpy ride in 2023, with negative growth in cargo volumes, declining rates, and increasing capacity. Operators need to shift their focus to new growth areas and prepare for a year of uncertainty and volatility. While the industry faces significant challenges, those who are able to adapt and innovate may find opportunities for success in the midst of turbulence.

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