Abrupt expansion in belly capacity, affecting cargo: Xeneta

According to a recently published report, while air cargo enjoyed record demand when COVID-19 closed borders and snarled supply chains, it is currently reeling from overcapacity and tumbling freight rates as the freight boom makes a hard landing. The switch in demand from goods back to services and the abrupt expansion in belly capacity on passenger planes have sliced about a third off cargo rates in the last year, states Reuters. It’s a perfect storm for the roughly $200 billion air cargo industry, which handles a third of global trade by value, industry executives and analysts say. Looking forward, shippers whose freight bills climbed in 2021, will have more bargaining power in upcoming winter price negotiations, Norwegian cargo analytics firm Xeneta said.