Page 30 - STAT November 2022 for Magzter

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He noted that inventories across the Q1 2023: What to expect? there will be airlines retiring some of the
world are full and “that’s also one of the What to do? freighters. “As I foresee, it will not cause
factors why the demand is low.” As an advisory for customer consideration, a concern or an imbalance in the market
Meanwhile, Stanley noted the improve- Stanley noted that the most important because the demand will remain low,”
ments in the capacity as a key indicator to piece is communication. “Despite the he said.
keep an eye on to understand the market. expected available capacity, providing He also observed MoM reduction in
“Usually, more capacity comes with lower accurate volume forecasts to forwarders the air cargo prices even though it is well
prices,” he said. is still important. The more you share your above the pre-Covid-19 levels and six
“We have also seen that there is addi- logistics and supply chain needs as manu- percent above last year.
tional capacity coming back to the market. facturers, the more we can have a strategy “Again, there are slight concerns be-
Even though it is not to the degree that to move the cargo around the world in a cause jet fuel prices continued to remain
we had in 2019 but it is growing with more timely and price-effective manner,” he said. high. Though they are softening, with
passenger flights coming back and bring- “There is always an unfortunate oppor- the recent announcement from the OPEC
ing more belly capacity,” he added. tunity for something unpredictable to hap- (Organization of the Petroleum Exporting
Chatterjee believes that the capacity will pen. It is important that we work together to Countries) plus countries that there will
be enough to carry the cargo as there is have a strategy going forward,” he added. be a reduction in the production of crude
Month on Month (MoM) improvement in Looking ahead into Q1 of 2023, he is oil and also with the Ukraine-Russia crisis,
capacity and it is already up 18 percent in expecting a slight peak during the Chinese the concerns persist. Apart from that, we
October 2022 compared to 2021 and even new year. “But overall the demand will be are expecting an aggressive spot market.
the belly capacity is 23 percent higher relatively soft.” Many trade lanes are already witnessing it.
than last year. Even though he agrees that the strategy And with more belly capacity, we can only
“The capacity has continued to for when to have and the length of RFPs expect a more aggressive market as the
improve because passenger travel has (request for proposals) depends on the months continue,” he said.
increased which is good news. Very lanes and markets, he notes that the According to him, the rates have contin-
recently the Covid-19 restrictions were requests are for longer periods down from ued to improve on an MoM basis but the
lifted in many Asian countries and we three months to two years. rates to go back to pre-Covid-19 levels will
expect more belly capacity to return in “So the opportunity to look for longer take some more time.
Q4 of this year,” he said. programmes, more defined programmes, “Towards the first quarter of next year,
He also raised some concerns. He said, predictable programmes are going to be we will see more or less the same rate lev-
“Since the demand is low, there are cancel- available next year. And I think most compa- els that we are seeing right now, but be-
lations happening. Because it is costly for nies will capitalise on that. It's good timing to yond that, it can reduce further. The yields
airlines to maintain capacity which is not do that around Chinese New Year,” he said. of the airlines have also softened quite a
used and it shows that supply is higher Meanwhile, Chatterjee predicted that bit in recent months which is reflected in
than the demand.” in the first three months of next year the current rate levels,” he said. 

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