SOARING ocean rates and rising air cargo demand were putting capacity under pressure, but the so-called preighter solution is unlikely to alleviate the situation, says one logistics expert, reports London's Air Cargo News.
'Some have pointed to the inflow of passenger-to-freight conversions, which have been dubbed preighters, to provide incremental capacity. But these are insufficient to meet the demand, in our view, and they address the symptoms of the problem, not the root cause,' said Stifel Financial Corp vice president of global logistics Bruce Chan.
'Ultimately, these conversions are temporary, and will only be deployed in the tightest of markets when rates are beyond a certain threshold, only to be pulled back when those rates decline,' said Mr Chan.
'Widebody belly capacity is still in the high-teens to low 20 per cent range below where it was in 2019, depending on the lane, in our view demand for the most part is much higher now than it was in 2019,' said Mr Chan.
Widebody passenger capacity is estimated to make up 30 per cent of the total market. Accenture's Seabury Consulting estimates June passenger-freighters accounted for around six to seven per cent of total widebody passenger flights.
'With the seasonal ramp toward the fourth quarter holiday peak in full swing and apparent momentum in spending on consumer goods, retail inventory to sales ratios are still near record lows,' said Mr Chan.
'Anecdotally, one large retailer said that even if it shut down all of its stores and just focused on replenishing inventory backlogs, it would still take months before things were back to normal. So shippers are fighting to play catch up in addition to meeting robust new demand, in our view,' said Mr Chan.
SeaNews Turkey
'Some have pointed to the inflow of passenger-to-freight conversions, which have been dubbed preighters, to provide incremental capacity. But these are insufficient to meet the demand, in our view, and they address the symptoms of the problem, not the root cause,' said Stifel Financial Corp vice president of global logistics Bruce Chan.
'Ultimately, these conversions are temporary, and will only be deployed in the tightest of markets when rates are beyond a certain threshold, only to be pulled back when those rates decline,' said Mr Chan.
'Widebody belly capacity is still in the high-teens to low 20 per cent range below where it was in 2019, depending on the lane, in our view demand for the most part is much higher now than it was in 2019,' said Mr Chan.
Widebody passenger capacity is estimated to make up 30 per cent of the total market. Accenture's Seabury Consulting estimates June passenger-freighters accounted for around six to seven per cent of total widebody passenger flights.
'With the seasonal ramp toward the fourth quarter holiday peak in full swing and apparent momentum in spending on consumer goods, retail inventory to sales ratios are still near record lows,' said Mr Chan.
'Anecdotally, one large retailer said that even if it shut down all of its stores and just focused on replenishing inventory backlogs, it would still take months before things were back to normal. So shippers are fighting to play catch up in addition to meeting robust new demand, in our view,' said Mr Chan.
SeaNews Turkey