“Capacity is going to be king for the rest of 2024.”
That’s the word from forwarders negotiating with airlines at the CNS Partnership event in Dallas this week.
The impact of the strong e-commerce market has been felt by every forwarder operating out of China and South-east Asia on the transpacific, whether working with e-commerce platforms or not.
“If anyone says they haven’t felt it, they are not shipping out of China,” said one senior airfreight executive from a large forwarder, who said the company does “some” e-commerce.
“There is an impact on capacity, and an impact on the pricing levels out of Asia Pacific. And that is something, in my view, that’s going to be with us for the foreseeable future. And when you look at 2024, capacity is going to be king. It’s not going to be the cheapest rate that gets the business, because I think we’re going back into a market where you have to be a forwarder that can actually get capacity, if the customers want their volumes.”
An airline executive confirmed that “everyone is looking for capacity right now” – referring to carriers and forwarders alike.
Those forwarders that have already secured capacity commitments for existing customers will weather the storm, but Q4 is likely to be tight. Not only has the US consumer started buying again, but geopolitical issues – shipping disruption in the Red Sea, concerns about the Straits of Hormuz following the hijacking of an MSC ship, as well as the closure of airspace in Iran following drone attacks – are likely to contribute to restricted capacity and higher rates.
The good thing is that shippers, forwarders and airlines are now well-versed in the impact of disruption.
“The pandemic saw growth for our customers, in terms of their understanding,” said the forwarder. “They know what to expect because we had three years of training during Covid for this.
“I think what the customers have figured out is appreciation for working with a forwarder that can still manage and maintain during the tough times. I also think that, from a forwarding perspective, we’ve got better at how we communicate that to customers.
“But for me, the message this year, especially as it relates to Asia-Pacific outbound, is that capacity will be the most important thing. And customers chasing the lowest rates are going to be challenged to find the necessary capacity to fulfil their demand.”
He warned against “the trap of buying low” and facing an anxious Q4, because “you cannot get your goods to market”.
“I think it’s going to be a quite robust Q4, building from the end of Q3 – after a quiet summer, normal seasonality.
“It’s going to be a hot Q4. I can’t wait.”
Source:https://theloadstar.com/for-forwarders-a-hot-q4-will-be-all-about-controlling-air-cargo-capacity/
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