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As shippers’ thoughts turn to “that golden time of year when we are forecasting”, all eyes are on the second half and what it might mean for the air freight market.

It’s been a reasonably good first quarter, report both airlines and forwarders. IATA pointed to a 4.4% increase, but most players say demand is regionally spread, with the vast majority of growth in Asia, and about half of that related to intra-Asia.

But Europe too is registering some signs of strengthening.

“Europe is doing reasonably OK,” said the regional head of one multinational forwarder. “There are a few carriers running around with empty capacity, but we have seen an uptick since February – which wasn’t a good month.”

But there is considerable caution in the market over prospects for the second half.

Oliver Evans, chief cargo officer at Swiss WorldCargo, told The Loadstar: “The first quarter was quite satisfying, even though it was a difficult environment.

“We see demand growing – but capacity is growing faster. It’s going to be a tough summer. Our expectation is modest and patchy growth.

“New aircraft will be coming in and that will spell trouble for operators of large amounts of capacity. We are still seeing good load factors  – and expect to for the rest of the year, but overall I think there will be weak demand and low growth.”

The head of sales at another major combination carrier agreed there had been a relatively good upturn in the first quarter, but believed growth in the second half would be “geographically spread”.

“It’s very regional-specific,” he added. “There will be growth, but it is from a relatively low base, and supply will still outpace demand.”

However, the Stifel Nicol air freight logistics confidence index rose for the first time in four months, although it warned: “The air freight market remains fragile.”

It added: “While all lanes noted increases, the US to Europe lane was the only one to decline. Meanwhile, the six-month expected situation barely increased as tradelanes recorded mixed signals.”

Also out this week was Danske Bank’s European freight forwarding index, which records changes in volume in the past two months and how volumes will develop in the next two months.

It showed a slight increase in volumes in April, but added: “Expectations for airfreight dropped to 47 for June (62 in May). A reading below 50 implies contraction.”

Cargo Facts added that while shippers were confident about overall volumes during the next year, it would be at the expense of air freight as shippers continue to seek cheaper modes.

The forwarder added: “There are buds of optimism going round, but yields are not going to get any better. It is simply down to the state of the economy and capacity.

“We are also still seeing modal shift. The economic depression has caused people to look at other ways of shipping goods – and air freight is the ultimate industry in terms of the influence of supply and demand. If there is more capacity than freight, there will be challenges for carriers.”

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