Spike In DHL Global Air Freight Reports Highlights “Challenges In Business Confidence”

Newsby Ankita Tripathy29 November 2023

Spike In DHL Global Air Freight Reports Highlights Challenges In Business Confidence

DHL Global Forwarding has unveiled key insights from its latest Air Freight State of the Industry report, providing valuable information on the current landscape of global air cargo. The report reveals a significant upswing in freight rates, posing challenges to business confidence. However, there is optimism, with expectations of easing inflation set to boost customer spending.

According to the report, global economic growth is projected to decelerate from 3.5% in 2022 to 2.5% in 2023, further dipping to 2.4% in 2024. Despite persistently high inflation levels, the trends for 2023 indicate a downward trajectory, with further drops anticipated in 2024.

In October 2023, the Purchasing Managers’ Index (PMI) experienced a decline to the neutral mark of 50, attributed to easing economic conditions, high rate of interest, and widespread inventory reduction policies limiting purchases.

Nevertheless, the air cargo sector maintains average growth in demand, accompanied by a continuous capacity expansion. If your DHL shipment is on hold, this might be one of the reasons behind it.

Key insights into air cargo demand highlight stability, with a slight month-on-month (MoM) increase and a flat year-on-year (YoY) trajectory. Air cargo capacity has surged, witnessing an impressive 11% increase since November 2022, with a substantial 19% growth in belly capacity during the same period.

Asia Pacific airlines lead the growth in air cargo demand with a 4.2% YoY increase, followed by Middle East carriers (2.5%) and Latin American airlines (1.5%). However, a MoM comparison reveals a slight reduction in capacity as some airlines adjust passenger flights due to decreased winter travel demand.

The report delves into jet fuel prices, with forecasts anticipating an average increase from $90/b in Q4’23 to $93/b in 2024. “Global average rates are trending upward with a MoM increase of +3%, although a -27% decline is observed compared to the previous year. Some seasonal uptick on certain tradelanes, such as ex-China, also reflects strong e-commerce growth,” as per sources.

In addition, the report provides noteworthy information on flight suspensions due to conflicts. Flights to Tel Aviv remain suspended amid the Israel-Gaza conflict, impacting airlines like Lufthansa, EuroWings, and Swiss Air. Furthermore, flights to Lebanon were suspended by these airlines in mid-October. Considering Russia/Ukraine relations, ongoing sanctions are anticipated for the foreseeable future.

This comprehensive report sheds light on the current challenges and offers valuable insights into the trends and dynamics shaping the global air cargo industry.

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Ankita Tripathy

Ankita Tripathy loves to write about food and the Hallyu Wave in particular. During her free time, she enjoys looking at the sky or reading books while sipping a cup of hot coffee. Her favourite niches are food, music, lifestyle, travel, and Korean Pop music and drama.

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