News / 2023 challenging for air cargo, say industry leaders – but what's next?

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Air cargo industry leaders are agreed that 2023 has been challenging and created uncertainty – but adaptability to market conditions is crucial.

The growth in capacity has contributed to market softness, but that has not stopped Turkish Airlines, for one, from committing to more volume.

“Rates are down 35% and capacity is even higher than 2019 levels, because of the [returning] bellies,” said Turhan Ozen, chief cargo officer. “There are tough market conditions, in terms of rates and volumes.”

Nevertheless, he said, Turkish plans to double its fleet to more than 800 aircraft over the next 10 years, despite obstacles such as manufacturing production schedules and freight rates.

Mr Ozen claimed the market was likely to pick up in the second quarter – or the fourth – of 2024.

“We are starting to see a shift upwards in PMI, and air cargo shifts up first. When the market goes down, there is a shift from air to sea – and it reverses when the market starts to pick up.”

UPS said it had seen modal shift this year. Marco Tafuro, air freight director for Europe, explained: “It has been a challenging year, but we’ve learned quite a lot. There has been a switch from air cargo to other modes of transport.”

There has also been a shift in sourcing, added Yossi Shoukroun, chief executive of Challenge Group.

“Production origin is moving, to South-east Asia, South Africa and North Africa,” he said, but also noted the challenging geopolitical market, adding: “2024 hopefully won’t escalate, but the signs aren’t good.

“Those changes are impacting economies worldwide and customers are looking for certainty, and for reliable and efficient supply chains.”

Wilson Kwong, CEO of HACTL, noted a global 4% drop in tonnage this year, although he said Kong Kong International Airport itself dropped just 1.3%, similar to HACTL.

“In past weeks we have seen some changes, with e-commerce-driven tonnage,” he said. “[Companies like] Shein and Tchibo are not going away, and we are trying to modify our infrastructure to support that. We are entering that space to help our customers.”

Mr Kwong thought 2024 would be characterised by volatility, but with some small growth.

Geert Aerts, chief cargo officer for Brussels Airport, also noted a 4% drop in tonnages – but added that the soft market had given the airport time to focus on strategy, such as accelerating its sustainability initiatives.

He was more optimistic about a market rebound than others: “Q4 will give us a sign of what 2024 will be – so maybe we can recalibrate at the end of the year.”

WorldACD said that chargeable weight in the year-to-date to September was down 6%, year on year.