DSV and Dimerco are warning of tight capacity out of Asia for the peak season despite carriers re-allocating capacity from trades with overcapacity.
In a market update, Taiwan-headquartered forwarder Dimerco said it was important for customers looking to ship from China to the US and Europe to plan for the fourth quarter early as capacity was selling out on some services.
"Securing space in advance is crucial to meet forecasted demand and ensure smooth operations. Widebody freighter charters with optimal routes and aircraft conditions are already sold out," said Dimerco Express vice president global sales and marketing Kathy Liu.
She said that the high demand was down to growth in e-commerce and modal shift from ocean due to the Red Sea crisis, port congestion and a narrowing of the price differential between air and ocean.
"This increased demand has led to a shortage of widebody freighters, which are now fully booked through the end of the fourth quarter.
"Airlines have responded by splitting their Block Space Agreements (BSA) into smaller segments, particularly on the China to US route, with signing ratios reaching their highest levels since
the pandemic."
DSV said that carriers had been switching freighters from the transatlantic, which is suffering from overcapacity, to the Asia Pacific market to try and capitalise on the strong demand, but it still expected a tight second half of the year.
"As we enter the second half of the year, the outlook for demand in the air cargo industry appears robust and outpacing capacity," the forwarder said. "Although this concentrated growth is around Asia, other markets are impacted due to capacity re-shuffling as the freighter airlines are chasing the higher yields from the APAC market."
DSV said e-commerce and the Red Sea crisis were driving demand growth.
"These two main demand drivers are setting the tone for continued pressure on capacity and yields for the second half of 2024, impacting not only APAC outbound but also other markets."
The Danish forwarder added that capacity was also under pressure due to "significant delays" in the delivery of Boeing 777-200Fs, while the approval of 777 conversions was taking longer than expected and some carriers were hesitant to order 777-200s as they await the start of delivery of next-generation 777-8Fs and Airbus A350Fs.
"Adding to the complexity is the impending retirement of many older freighters. This will result in flat capacity growth for the remainder of 2024 and a bleak outlook for 2025," DSV said.
It added: "While some markets experience overcapacity and the redeployment of freighters, the overall picture for airfreight capacity remains challenging. The industry must navigate these hurdles to meet global demand effectively."
Earlier this week, both Air France KLM Martinair Cargo and Qatar Cargo confirmed they were moving widebody capacity out of the Latam-Europe trade to Asia-Europe.
This is likely to result in more cargo transiting through Miami and using the large amount of passenger capacity between the US and Europe, where rates have tumbled due to the oversupply mentioned by DSV.
