Air cargo was living the dream when the pandemic threw a wrench in the global supply chain. For a hot minute, it was the way to go, moving everything from jeans to jacuzzis. Fast forward, and the script’s flipped. Passenger planes are back in action, and that’s throwing shade on air cargo’s big moment.
Remember those passenger planes parked during the pandemic? They’re soaring again, and their belly storage is back in the game. It’s like the air cargo’s famous sibling stole the limelight just when the show was getting good.
Guess what? Cargo rates took a nosedive, losing about a third of their value in just one year. Ouch! Even some of our brave pilots are zipping off to join the passenger planes, chasing new adventures.
It’s not all doom and gloom, though. For those of us who splurged on online shopping during the lockdown (guilty as charged), the reduced cargo rates could mean a sweeter deal this winter. But let’s not kid ourselves, for the big players in the air cargo biz, it’s tough times ahead.
Peter Sand, a top dog at Norwegian cargo analytics firm Xeneta, chatted with Reuters. “Cargo operators? They’re in for a bumpy ride!” he said, with a hint of drama. “Shippers have options galore, but the real demand is playing hide and seek.”
Western Global Airlines, once flying high, hit turbulence big time. They’ve recently raised a white flag, seeking protection from a Delaware court. And guess what they blame? Yep, the wild winds that shook the air cargo world starting in late 2022.
The rates to ship goods have tanked. One kilogram of freight? A cool $2.30 in August, a nosedive from the $5 tag in 2021. But let’s keep it real – despite the slump, rates are still higher than the good ol’ pre-pandemic days. Yet, everything from fuel to folks willing to work is getting pricier.
There’s a silver lining, though! The International Air Transport Association spilled the beans that in June, the decline in air cargo slowed down a tad. Some say that’s thanks to China facing its own set of hiccups. But, Peter Sand’s betting rates will keep sliding.
Planemakers are in a pickle, too. They’ve pumped money into sleek, windowless jets, but now? Eddy Pieniazek, a smarty-pants consultant, let slip that the demand’s dwindling. Fewer folks are looking to transform old passenger planes into cargo jets.
And whispers in the industry? Big-shot carrier Cathay Pacific might be getting cold feet on a $2 billion order. Though they’re playing it cool, saying they’re “keeping all options open.”
Heavyweights like Boeing and Airbus are still optimistic, but investors? Not so much. “We’re seeing delays, hesitations, and planes not finding new homes after conversions,” Robert Convey from Miami’s Aeronautical Engineers dished to Reuters.
Buckle up, folks! The skies are full of twists and turns, and this drama’s just getting started.