Despite air freight challenges we deliver time-sensitive solutions

Global air cargo volume is almost back to pre-pandemic levels, maybe already exceeding these according to some trade sources, with high demand reported in the first two months of 2021 and January volumes 1.1% above the 2019 level.

But while cargo demand is rebounding, there is still much more than half of the available air cargo capacity missing from the market, due to the continued grounding of the long-haul passenger fleet that cannot fly revenue paying customers around the globe. The International Air Transport Association (IATA) recorded that air freight capacity lost ground for the first time since April, dropping 5% on previous comparable months.

Even with the COVID-19 vaccine roll-out, international travel is down over 70% and will take a long time to recover, which means it is unlikely that we will see much of the passenger fleet return this year, so strong demand and tight capacity is expected to keep rates elevated through 2021 and beyond. The airlines have no incentive to fly aircraft that cannot deliver positive financial return on the single revenue stream that they now rely on through cargo movements.

Available belly-hold capacity is down around 90% compared to the ‘normal’ market levels, and in a reasonable worse-case scenario, industry analysts suggest it may be 2024 or even 2025, before the passenger fleet is back in the air at the sort of scale that will make a material difference to capacity and schedule assurance driven by passenger expectations.

The heavily disrupted container shipping market – with space shortages on vessels, port congestion, unreliable delayed schedules and difficulties in sourcing equipment – is exacerbating the air situation by driving ocean shippers of high value and critical products into the air cargo markets. ‘Distressed sea freight’ as it is termed in the industry which means air freight recovery in reality.

Comparisons with 2020 are distorted by the impact of COVID-19, so data providers are using 2019 figures, which confirms that the recovery has been impressive.

Air cargo demand is now nearly at par with pre-COVID volumes, despite much less capacity in the market, with global air cargo tonnage just 1% behind 2019 and IATA data showing global demand was up 1.1% compared with the same month in 2019.

Throughout the pandemic, air freight costs have risen massively, due to the sustained high demand and limited capacity and demand remains high, driven by huge increases in e-commerce and continuing demand for medical supplies.

The International Monetary Fund expects 5.1% growth in 2021 and the pandemic lockdowns has seen e-commerce grow 28% globally, while exports of personal protective equipment from Asia to Europe and the U.S. remain strong and pharmaceutical companies are rapidly increasing deliveries of COVID-19 vaccines, with airlines playing a key role in transporting doses.

The IHS Markit global Purchasing Managers’ Index (PMI) reached 53.5 in January (anything above 50 indicates growth) and the relatively low level of inventories compared with sales volume, means that many businesses had to quickly refill their stocks, further driving demand for air cargo services.

Metro work closely with the world’s largest cargo airlines, ‘preighter’ carriers and key hub partners to offer a range of air and sea/air services for time-sensitive shipments at competitive rates in the current market – along with our innovative sea/air products. We have, and are currently reviewing, charter operations dedicated to adding additional capacity where required by our customers.

If you have urgent or time sensitive consignments and would like to explore options, transits and costs, please contact Elliot Carlile or Grant Liddell for all options available to ensure that deadlines are always met.