FedEx is predicting that next year air cargo capacity will once again be hard to secure with space remaining scarce and supply chain issues supporting strong demand.

Karen Reddington, President of FedEx Express Europe, explained that passenger networks – and therefore bellyhold services – were taking time to resume and this would put cargo capacity under pressure.

Supply chain issues caused by Covid are also likely to continue to impact the air cargo market, she said.

“The pandemic has undoubtedly brought supply chain resilience to the fore. With a new, highly contagious Covid-19 variant, reduced port and air cargo capacity and heightened consumer demand, it will continue to impact global trade well into 2022.

“As passenger travel remains depleted, air cargo capacity will be constrained through 2022 all while the demand for goods is likely to grow, with 2021 trading volumes overtaking pre-pandemic levels and achieving their fastest year of growth in over a decade.

“In the long-term, supply chain challenges are likely to trigger a change in the trading landscape, as global trading networks shift and we see continued regionalisation of supply chains.”

The latest figures from Seabury Consulting, part of Accenture, show that air cargo capacity in the first two weeks of December was down by around 4% compared with the same period in the pre-pandemic year of 2019.

Meanwhile, demand growth continues to pick up – over the first 10 months of the year cargo demand in cargo revenue tonne km terms is up by more than 8% according to IATA – putting capacity under pressure.

Reddington said that FedEx had introduced new flights over the last few months to mitigate the situation.

“FedEx has the network flexibility and the experience to support businesses navigating these changes,” she said.

“Our new intra-Europe, Europe-APAC and transatlantic flight capacity upgrades are proving vital in keeping goods moving this peak season and will continue to facilitate trade and strengthen global supply chains into 2022.”

Earlier, this month, FedEx announced second quarter operating income surged 9% year on year to $1.6bn, driven by higher yields and FedEx International Priority volume growth, which offset the negatives of continued staffing challenges and COVID-19-related air network inefficiencies.


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