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Amid a rapidly increasing glut of capacity in the market, forwarders and brokers are at odds over the costs of long-term charters.
One forwarder told The Loadstar he thought the charter market was “done”, after carriers began “splurging” money on freighters during Covid.
“Charter operators are screwed now because there’s this mix of spare capacity being dumped onto the market as passengers return and services to Russia remain barred,” the forwarder said.
“With the free cheap space available and economic conditions leading to a lessening of demand for consumer goods, there just isn’t the demand for charter services. We’re seeing 50% of the airfreight we were moving a year ago.”
The forwarder claimed 100-tonne charters from Hong Kong to London were priced at $550,000, compared with $2 per tonne on scheduled services.
Alongside what he saw as the excessive costs of charters, “which I presume will end up [with aircraft] being parked up”, he noted that shipping lines had “smartened up” when it came to running services, with schedules running eight weeks in advance compared with six weeks previously.
A spokesperson for Air Charter Service, however, stressed that “there is no problem with ad-hoc charters”, denying that carriers would be forced into parking aircraft.
“I think the problem you are referring to is those forwarders that have block-booked charters for the whole year at a fixed rate, and now they are understandably angry as the rates have plummeted,” the spokesperson told The Loadstar.
Pointing to the prices for Hong Kong-London, the spokesperson said Asia-Europe and Asia-US were not key routes for brokers.
Even so, sources said the charter industry, if not down, was certainly considered “pivoting” in terms of business models: Chapman Freeborn has recently established a new department to deal specifically with ACMI leasing.
Asked if he considered the move a “pivot”, Chapman’s CEO, Eric Erbacher, told The Loadstar he considered it “just an additional segment”.
“We are branching out and diversifying what we can offer our customers and our new ACMI department is a part of this. But I should stress that we were already the largest ACMI lease holder on the market,” he said. “So, I see it as a part of that, but we have been working on additional growth plans for the ACMI segment.”
Another industry source said the development of an ACMI department was due to the need for operators to “get creative”, given the present state of the market, but, like Mr Erbacher, stressed that airfreight had always operated in cycles.
The source added: “We are just in part of a cycle, and those that know the business know how to adjust accordingly – it’s important to note that the sector is still ahead of 2019 figures.”
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