Air Cargo Capacity stagnant as demand rises forcing up prices

We’ve entered a strange period in time where once struggling air cargo carriers are now rarely adding new aircraft but demand for air freight is soaring.

A global economy that’s in growth – much of it fuelled by e-commerce has taken up the slack in air cargo, filled it and is now causing problems for traditional air freight users.

Fruit, fresh vegetables and flowers, along with perishable pharmaceuticals have been able to shop around for the most part, on an on-demand basis. Those days are over.

Even during the low season, cargo while not at capacity, is struggling to fulfil constricted route demand, Heathrow, Chicago and Miami top the list.

Airlines aren’t buying new aircraft or converting them at a pace that can fill demand. And they’re not likely to. Belly freight in new aircraft types is proving profitable, replacing old aircraft is a long slow process.

Most of all though, cargo operators have learnt that demand is forcing freight forwarders and big corporate shippers to pre-book blocks of capacity months in advance. At premium rates. Once unheard of this is fast becoming a requirement if you need to get anything moved.

Air Cargo is in a golden age right now – making money is easy providing you keep your head, don’t raise capacity and don’t tempt fate by buying more aircraft. When the bust finally comes – and recessions always do, you’ll be in a better position and able to sustain the inevitable hard times that much better!

Meanwhile the final customer – that’s you and me – will find themselves paying more for air freighted imported goods.

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