Panalpina’s forecast of possible hike in air freight demand stands vindicated

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December 11, 2017: The airfreight industry seems to be flying high in 2017, thanks to the market which has developed a new dynamic, characterised by tight transport capacity and sustained high freight rates.

According to industry sources, 2017 has been an exceptional year for air freight as the global air freight demand skyrocketed

This summer witnessed the usual calm, however Panalpina’s early prediction of a busy peak season during the last quarter turned out to be precise.

During October, Panalpina recorded its highest ever monthly air freight volumes—a record that was beaten only one month later in November, as the latest figures show.

While speaking to Lloyd’s loading list last month, Panalpina’s global head of Air Freight, Lucas Kuehner, shared his insights into the current state of the air freight market. He touched upon a diverse topic, including capacity scarcity vs capacity shortage, Panalpina’s charter network, trade lane growth, European airports at their limit, and the trend of heavy air freight pushed aside by e-commerce.

Trade journalist Stuart Todd who turned the conversation with Kuehner mentioned in his article how E-commerce is a challenge and opportunity for air freight. He said that e-commerce is certainly swelling peak season demand this year and accommodating it into airborne trade flows, week in week out is one of the major challenges facing the industry today.

“There’s no reason why the current challenges will go away. I think the air cargo community—shippers, airlines and forwarders have to get used to a market environment where capacity is scarce and at its limit, at least for several more weeks, probably months,” said Todd.

Kuehner also brought up the unsatisfactory situation at Europe’s airports, where ground handling infrastructure is bursting at the seams, especially in Frankfurt, London Heathrow and Luxembourg.

“At least there seems to be no new strike looming in Frankfurt,” said Kuehner.

As for the peak season, there is no sign of a slow-down yet. Between Asia and Europe, and between Asia and the Americas, the demand for air freight is still high in both directions.

The demand is high in outbound Europe to Asia and the Americas, and there is hardly any capacity left. The situation is similar for flights to Latin America from Asia, where capacity is almost not available anymore.

“On a first-come basis, we still offer express solutions. The only route where things have slowed down a little is on the transpacific—between Asia and US, but it is too early to predict. In any case, we remain alert and agile, just as we have all year through,” says Kuehner.

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