News date : 19 Apr 2020

Airfreight rates are expected to remain elevated in 2021 as the demand outlook remains uncertain and belly capacity is slowly re-introduced into the market.

Writing in a Baltic Exchange market update, Bruce Chan, vice president – global logistics at investment bank Stifel, said that airfreight rates are likely to remain elevated and volatile for some time, and those looking for reprieve in 2021 may have to be patient. 

Chan said that a lack of bellyhold capacity would drive the high rates as passenger airlines will only slowly re-introduce international widebody services.

“By the second half of 2021, we do anticipate passenger flights to resume, especially as vaccinations pick up,” he said. “But we caution against over-exuberance, as the first flights to come back are likely to be short-haul, domestic, and leisure, which align less favorably with cargo.

“Core long-haul international travel and the belly capacity that comes along with it will be slower to return, in our view, so capacity relief for cargo should lag the recovery in airline passenger activity.”

Chan said that extra freighter and PAX-freighter flights would help alleviate some of the capacity pressure, but there were limits.