A new equilibrium
The IMF’s latest World Economic Outlook in April forecasts a “rocky recovery” from the recent global economic challenges, with growth forecast to slow from 3.2% in 2022 to 2.7% in 2023 – “the weakest growth profile since 2001, except for the global financial crisis and the acute phase of the Covid-19 pandemic”. These figures are reflected in a continuing year-on-year drop in global air freight activity, although average rates remain significantly higher than pre-Covid.

There is also a lot going on still in various areas of the market, including continuing growth in certain product categories such as the ‘evergreen’ Pharma sector (see page 14), where operators continue to invest in better facilities and processes. But there are also fresh waves of air freight developments and initiatives from the tech side, plus further M&A activity among major freight forwarding and cargo handling companies.
In Asia (see page 6), there are signs that the US and China are indeed decoupling in many fields, although the picture is a complex one – in part determined by the availability of logistics and air freight capacity in alternative countries in the region. Vietnam, Malaysia and Thailand are among the countries that have seen the most manufacturers set up their additional Asian locations – under a ‘China+1’ supply chain model. Various southeast Asian countries are gearing up with improvements to existing infrastructure and entirely new facilities, and new free trade agreements look set to further boost their opportunities.

On the freighter side (page 25), the market is continuing to adjust to the dramatic changes of the last three years. With the commercial air travel market continuing to recover, there are very few passenger aircraft still operating in cargo-only mode as ‘preighters’. But Boeing says utilisation of dedicated all-cargo aircraft remains elevated over pre-2019 levels, despite the softening in demand and pricing and the reintroduction of older freighters and acceleration of P2F conversion programmes of the last two years. And forwarders insist there’s still a need for the own-controlled networks they have expanded during the pandemic.

Elsewhere, the continued growing influence of new technology in air freight and logistics is reflected in ‘Innovation Insights’ articles on the digital revolution in cargo insurance, in which insurance specialist Breeze (page 34) highlights how technology can help assess risk, detect fraud, and reduce costs and human error. And Raft’s Lionel van der Walt discusses how the age of artificial intelligence in freight has already begun, and the implications of this.
And finally, reflecting our greater recent and current focus on people-related topics, the main interview article in this issue of the magazine examines some of the key factors in developing leadership qualities and capabilities within air cargo professionals, via an extended discussion with the larger-than-life president and CEO of ACL Airshop, Steve Townes. He’s had an interesting career path, and his insights about leadership provide much food for thought. I’ve certainly found myself sitting up a bit straighter in my chair!