Long-term cargo market demand to remain strong

ATLANTA — Airfreight rates appear to be on the decline in the cargo industry as demand remains strong, according to key leaders on the Supporting Cargo Carriers, E-Commerce Networks and Logistics at the MRO Americas 2023 conference here this week. Rates on the decline “I think the rates have softened a bit,” MTU Maintenance Vice President of Marketing and Sales Les Cronin said. “During COVID, the rates were up because the value freight wasn’t available on passenger services. Now that we have passenger services coming back into international operations, the rates are going back down.” [caption id="attachment_414594" align="alignright" width="450"] Amerijet is weighing its potential 767F replacement options. (Photo/Amerijet)[/caption] MTU Maintenance is an MRO facility that specializes in engine overhaul and repair. Ray Bennett, vice president of technical operations at Amerijet, echoed the same sentiments — but from an operator’s perspective. “The activity level is still the same and the payload weights are almost the same as they were a year ago, but the yield is down on the financial side of things,” Bennett said. “We're as busy as we’ve ever been. We’re just not making as much per kilo per pound.” Bennett added that the movement of cargo during the pandemic was unbalanced as the West Coast was in a giant traffic jam. “People were shipping unbelievable things and it was great while it lasted. As my CEO, Tim Straus, always says, ‘Look, we’re the first ones into the recessionary impact, and we’re first ones out,’” Bennett said. Passing the baton The freighter aircraft shift in the medium widebody and regional freighter sectors has already begun as operators transition from the 767-300F to the A330F platform, while Embraer completes its certification and introduction of E190F/E195F regional freighters into service. “When it comes to widebodies, we are still taking 767 freighters and are operating three new 767Fs,” Bennett said. “The question that remains is what does the airline do in the next decade? Does Amerijet hang on to the diminishing 767-300ER feedstock, or is it time to switch to probably the A330s, which is the next viable widebody that we like?” Meanwhile, in the regional market, Embraer’s Vice President of Worldwide Customer Support and Aftermarket Sales Danielle Vardaro expects to see steady long-term growth. There’s a gap that we’ve seen in the market that our E190F/E195F is perfectly positioned to fill and that is between the turboprop and the narrowbodies, Vardaro said. She added that Embraer’s quick market assessment shows that there is market demand of about 700 freighters over the years to come because of the e-commerce shift that is happening. E-commerce is here to stay E-commerce and express shipping will ensure the demand for airfreight continues to grow with more regional freighter capacity being added and lower rate options on the long-haul freighter segments. “I think what we’re seeing and what we’re looking forward to is that the e-commerce business itself is going to find new markets in other regions of the world,” Cronin said. He noted that e-commerce giant Amazon is exploring opportunities in South America and is evaluating what products can be shipped from South America to the United States. “What we felt as humans is that, yes, things have slowed down because many of us are back in the office,” Vadaro said. “But we have also recognized that people are still working from home and that e-commerce is here to stay.” “What we see happening today is full payloads going one way,” Bennett said. “For example, we worked with an operator flying into Tel Aviv and they just couldn't get the load coming back, so they down-gauged from a dedicated freighter to using belly cargo. They can do that because it is generally an e-commerce type product.” The first Cargo Facts LATAM takes place May 15-17 in Panama City. Register today.

Long-term cargo market demand to remain strong

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Long-term cargo market demand to remain strong

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Long-term cargo market demand to remain strong

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