News Update – 4/28/23

Influx of capacity brings a ‘new era’ for air cargo markets

New capacity in the passenger and freighter market is changing the parameters of air cargo this year.

Different aircraft entering the market will alter the balance, according to Frank Ziesemer, CEO of Strike Aviation. But he said these changes had not been thought through, particularly in the freighter market.

“During the pandemic, everybody was looking for freighters, because passenger aircraft were grounded. So the airlines shifted towards cargo aircraft without any clear strategy, just to satisfy the market’s needs.

“Currently, air cargo carriers are increasing frequencies and capacities to gain market share. Some of them do it without calculating the costs or profit and loss, and without receiving any state aid, which could lead to unforeseen difficulties,” he explained.

Here’s How Supply Chains Are Being Reshaped for a New Era of Global Trade

When a measure of strains on global supply chains fell earlier this year to levels last seen before the Covid-19 pandemic, it signaled to some that the product shortages, port bottlenecks and shipping disruptions of the past three years were over and that a new era of stability was on the horizon.

But industry experts say a “return to normal,” as the Federal Reserve Bank of New York described its Global Supply Chain Pressure Index in February, hardly means that companies are going back to conventional, some would say complacent, supply chains.

Instead, say academics and consultants, the experiences during the pandemic, along with changes in geopolitics, are leading to broader, potentially long-lasting changes in how companies manage the flow of goods, from the sourcing of raw materials to manufacturing and distribution.

The economy is in a ‘freight recession,’ with China trade decline continuing

As the big East and West coast ports jockey for supremacy in total trade volume coming into the country, the pie is getting smaller as the economy softens.

The latest trade data from the Port of New York and New Jersey, the nation’s largest container port on the East Coast, points to a slight uptick in container processing but future ocean freight orders continuing to pull back.

In the month of March, the Port of New York and New Jersey handled 574,452 TEUs (20-foot equivalent units) making it the nation’s third-busiest port. But the difference between the Port of Los Angeles, which processed the most containers in March, and the Port of New York/New Jersey, was 48,781 TEUs.