“Capacity will be crucial for the remainder of 2024,” according to forwarders in discussions with airlines at the CNS Partnership event in Dallas. The impact of the booming e-commerce market has been significant for forwarders operating in China and Southeast Asia on the transpacific route, regardless of their involvement with e-commerce platforms.
A senior airfreight executive emphasized the impact on capacity and pricing levels out of Asia Pacific, stating that capacity will be the key factor in the market moving forward. An airline executive confirmed that the demand for capacity is high among both carriers and forwarders.
While forwarders who have secured capacity commitments for existing customers may fare well, Q4 is expected to be challenging. Factors such as increased U.S. consumer buying, shipping disruptions in the Red Sea, concerns about the Straits of Hormuz, and airspace closures in Iran are likely to contribute to restricted capacity and higher rates.
Fortunately, stakeholders in the industry are more prepared for such disruptions following the challenges posed by the pandemic. It is important for customers to value partnerships with forwarders who can navigate tough times and effectively communicate challenges and solutions.
Looking ahead, the emphasis remains on the importance of capacity, especially in the Asia-Pacific outbound market. Customers who prioritize low rates may struggle to secure the necessary capacity to meet their demand. It is advised to avoid the temptation of seeking the lowest rates and to anticipate a robust Q4 with high demand.
Overall, the focus on capacity and strategic partnerships will be crucial in navigating the challenges and opportunities in the airfreight industry for the rest of 2024.
