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Marketplace Trends: Optimism for the near and long term

Posted By Greg Guillaume, Thursday, August 24, 2017

Of the many changes in global airfreight markets that we all see in the conduct of our business, there are two that are top-of-mind for many of my TIACA (and Atlas) colleagues.

 

In the recent past, we have seen significant changes in the market for international airfreight. Since early 2016, demand growth has been accelerating, consistent with improvements in the global economy. However, available capacity has not kept pace over that same period, with the growth rate trending downward over that same period. 

 

In August 2016 we reached an inflection point where the rate of growth in demand exceeded rate of growth of supply. The divergence in growth rates recently has been extreme—not since 2010 have we seen similar dynamics in supply and demand. Current conditions are leading to a stronger pricing environment, and better capacity utilization, which is cause for optimism in the near term.

 

Over the longer term, e-commerce will account for an increasing share of retail sales—clearly this is the “mega-trend” of our times. Particularly in developed economies, we are seeing that e-commerce often uses express airfreight as a mode of delivery to the customer. With the anticipated future expansion of e-commerce in emerging economies, its effect on airfreight will drive growth for many years to come.

 

 

Greg Guillaume

Senior Vice President Strategic Development

Atlas Air Worldwide Holdings, Inc.

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