“Long haul freighters are increasingly becoming harder to book”

There is a lot going on in the global cargo charter market. The Red Sea crisis and increasing cross-border ecommerce cargo shipments have created demand for cargo charters like never before. Pierre Van Der Stichele, vice president of global cargo at Air Partner, in an interview to The STAT Trade Times, talks about current global cargo charter market trends and how the cargo charter division of Air Partner is building its capabilities for a strong peak season demand. Pierre Van Der Stichele, a cargo charter specialist with over 30 years of experience, joined Air Partner in January 2022. Air Partner's cargo division is a global leader in full-service logistics provider. Air Partner, founded in 1961, was acquired by Wheels Up in April 2022.

How strong is the demand for cargo charters now and do you expect to see the demand turning even stronger as we approach the last quarter of the year?
While the beginning of the year saw average levels of demand, with an unusually low February, the market has made a significant come back, with strong performances in April and May. Saying this, the fluctuation in demand seems to be changing with ups and downs every two weeks. As a result, the cargo business in general and, also charters in general, is quite unstable. I also forecast that the peak season will be better than 2023 and we may suffer on lack of wide body long range freighters availability due to regular peak season traffic due to predominantly e-commerce companies swallowing the capacity. What this means for charters is that price will increase and more lead time will be required for wide body freighters for the October to December period.

What are the main reasons for the spike in demand?
There are a number of factors contributing to increased demand. The automotive industry is experiencing what is most likely a pre-summer surge as many auto manufacturers in Europe traditionally close for 2-4 weeks during the summer. Humanitarian services demand appears to have materially increased due to a potential softening of allowing relief cargo to enter Gaza, however this is not sufficient. Elsewhere, we have seen a significant increase in transporting AOG (aircraft on ground) parts since passenger airlines are back in service. I would say we are on par with May of 2019 before Covid-19 and are expecting current levels of demand to surpass 2019 levels.

The peak season will be better than 2023 and we may suffer on lack of wide body long range freighter availability because of the regular peak season traffic and also due to predominantly e-commerce companies swallowing the capacity.
Pierre Van Der Stichele, Air Partner

How strong is the ongoing disruption in Red Sea transit, a reason for shippers and forwarders to look for cargo charters?
Despite an increase in requests following the onset of the Red Sea disruptions, not all potential offers have converted into charter bookings. From Asia to Europe in particular, the impact of the disruptions in the Red Sea haven’t been as significant as initially predicted.

How do the constantly evolving and fragile geopolitics and how they impact ongoing conflicts in several regions of the world affect your operations and make them even more complex?
I cannot deny that they do throw up a number of challenges to our operations, including airspace restrictions. However, thanks to our strong set of resources, we are able to navigate and manage these ever-evolving conditions.

How competitive is the cargo charter market now?
The cargo charter market is extremely competitive at present. The introduction of numerous new brokers to the market, slim margins, and increasing prices all present challenges for our team to find new solutions. For example, we are starting to see a squeeze, especially on the long haul sectors in Africa and we must continue to innovate our offering to maintain our market-leading position.

What are the regions or trade lanes where you see strong demand for cargo charters?
Presently, intra-European lanes are very strong, as well as flights to Africa and the Middle East across industrial and humanitarian cargo.

Do you see strong demand from Asia, which continues to be the key manufacturing region, particularly China, for the world despite geopolitics, trade sanctions, tariff wars and the China+1 strategy of diversifying production by global manufacturing companies?
Long haul demand from Asia to the USA and Europe is very strong at this time predominantly for e-commerce. So much so that chartering a B767-300, B747F and B777F with suitable long range has become short in supply, unless given significant notice (3-4 weeks).

Do you have any specific verticals that you have increased focus on development and investment?
Since the end Covid-19 pandemic, the Time Critical business has seen strong growth year on year across all segments from NFO (next flight out), our recently launched OBC offering (On Board Courier), right down to AOG support for major and regional carriers.

You have been heading the global cargo charter division for Air Partner for the last two years and you come with several years of experience, what are your observations on the growth momentum within Air Partner Group and the direction of the global cargo charter market?
I’ve been in the cargo business for 30 years, the last two of which have been with Air Partner and I can say that the appetite for growth has always been there. There’s no doubt that the market has been in a state of flux over the last few years since Covid but we are seeing positive growth, particularly in OBC and Time Critical. And with the recent appointments of Jon Corbi and Patti Cole to our US Cargo team, these are areas that we’re really investing in.

What are your focus areas in the mid to long term for the cargo charter business within Air Partner Group? Air Partner has been making announcements in the recent past about key appointments to grow your business – how significant are they in the long term vision for the cargo business of Air Partner?

As a charter broker, we must always ensure that we have the right expertise in our business to add value. This comes from selecting the right people. We are a people-led business and having a team of experts is what makes the difference. Our search for new talent has been key to our success in expanding our global Time Critical capabilities as well as OBC.

How challenging is it now to identify and get cargo aircraft on time to fulfill your customer demands?
This varies by request. Finding an aircraft capable of carrying outsized cargo proves to be difficult due to the lack of available aircraft globally. Some aircraft previously available to us are now are out of bounds due to Russian sanctions put in place, such as some Il76 and Antonov 124s. Moreover, due to the increase in e-commerce flights and the long lead times required, long haul main deck freighters are increasingly becoming harder to book. In addition, there are some ageing aircraft or less efficient aircraft that should be leaving the world stock quite soon, thus further reducing the numbers available. Luckily, medium haul sized aircraft like the B737F and the A321Fs are plentiful at the moment.