Global freighter capacity is “maxed out” for this year and next year and, even though a significant amount of conversion work is underway to transform aircraft from passenger to all-cargo configuration, this will not produce a substantial amount of additional (maindeck) capacity in 2022 nor in the following years, according to analysis from a leading global management consultancy.
“The freighters that are flying currently are flying maximum block hours. Every freighter aircraft still fit to fly - irrespective of how old and inefficient - has been put into service, which has enabled maindeck capacity to increase by 30% when compared to pre-COVID levels,” Ludwig Hausmann, who leads the air cargo service line within the global transport and logistics practice of McKinsey & Company told Lloyd's Loading List in an interview.
“But belly capacity, which prior to the health crisis represented 55% of all air cargo capacity, is still down by slightly over 50%. The upshot is we have a capacity shortfall of around 12-13% and for the gap to close, you really need to believe that belly capacity is coming back to close to where it was before.”
Global airfreight volumes and capacity were up in April 2021, the latest figures from analyst WorldACD, suggesting — as with March figures — “some kind of normality”. Global demand in April was up 53% on a year ago, while widebody capacity was up by 51%, reflecting the collapse in bellyhold networks a year ago.
Ocean freight spot rates rose further again this week from their already record-high levels, driven in particular by increases on Asia-Europe trades.
The ocean freight market’s ‘perfect storm’ has worsened in the continuing aftermath of the Suez Canal blockage, driving up rates on the Asia-Europe trade lane to unsustainable levels and threatening the very survival of many shippers and importers while also impacting end-consumers who are set to pay far more for goods, according to one UK-based forwarder.
Container shipping service quality is continuing to worsen, with the number of boxes being rolled increasing. Figures from freight visibility platform project44 shows the percentage of containers missing their scheduled sailings is rising, with some carriers and ports rolling more than half their cargo in April.
“Carriers have been watching their rollover rates increase for over a year, and have so far failed to mitigate the situation,” said its vice-president Josh Brazil. “Shippers need to accept this as the new reality.
“They are going to have to start making structural adjustments to their supply chains and enhance their visibility if they want to keep shelves stocked and factories running.”
The average rollover rate for April across ports and carriers surveyed by the company was 39%, but there were outliers such as Malaysia’s Port Klang, Rotterdam and Athens showed signs of “endemic congestion”, rolling 64%, 54% and 59% of cargo, respectively.
Shanghai containerized freight index, weekly spot rates, 2009–9 April 2021
Source: UNCTAD calculations, based on data from Clarksons Research, Shipping Intelligence Network Time Series.
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