Damco anticipates air cargo sector to pick up in second half 2020
THE US-China trade war has been blamed for the slump in air freight volumes last year by Damco's global head of air freight, Ferwin Wieringa
THE US-China trade war has been blamed for the slump in air freight volumes last year by Damco's global head of air freight, Ferwin Wieringa.
Furthermore, since consumer demand also dived in 2019, air freight has not increased in the 'retail and fashion vertical, hence ocean freight as main mode of transport could fulfil largely the supply needs of these consumer goods'.
In the European region, some of 'Damco's customers have been choosing to go back to air freight instead of rail, because constraints on the supply side, as well as technical issues, have been causing problems for rail transport,' London's Air Cargo News reported.
Looking forwards to this year, Mr Wieringa expects to see some growth in air cargo, picking up particularly in the second half.
E-commerce demand will continue to expand as consumer spending power increases in regions like India, China and Africa, buoyed by greater access to internet-based devices and services.
In spite of the overall downturn in consumer demand in the US and Europe, the shift from high-street shopping to online will contribute to growth in air freight volumes in 2020.
Pharma and perishables will continue to grow as the markets mature, but he expects 'stagnation in the retail and fashion sectors, mainly because of the trade war, slowing demand, and the fact that the supply chain in these verticals can still be managed in terms of ocean freight.
'In 2020, we will be taking advantage of these opportunities and challenges with a pro-active strategy for airfreight, bringing a new business focus in targeted areas with new products and service offerings,' said Mr Wieringa.
'However, for there to be really positive growth in the air freight market, there needs to be a definitive resolution to the US-China trade war.
'Damco will continue to develop our digital capabilities, online booking options, and rate availability to rapidly adjust to the needs of our customers.'