Carrier-forwarder agreements may shift with new capacity

Carrier-forwarder capacity agreements may shift as new capacity may saturate the market, stakeholders say. “We see a lot of new capacity coming into the markets … and eventually, more [capacity] than there will be demand for going forward, especially if we enter recessions in parts of the world,” DSV Senior Director of Air and Sea Thomas Christensen said during a Sept. 13 webinar hosted by Air Cargo World . “At the same time, carriers really want long-term contracts which doesn’t really go hand-in-hand with the market as it is right now.” See also : Stakeholders: Handler-forwarder connectivity must improve Indeed, there are now more widebody capabilities available as passenger aircraft slowly resume services and as completed converted freighters come online , Jo Feiks, corporate director of product management, air cargo at info-logistics provider cargo-partner, told Air Cargo World . [caption id="attachment_96538" align="alignright" width="391"] Photo: cargo-partner[/caption] “This will result in extensive available main-deck capacities in the foreseeable future,” Feiks said. “As a consequence, the cards on the market will be reshuffled, which will certainly lead to corresponding consolidation developments.” Capacity agreements are relatively more flexible due to the airfreight market landscape, making long-term agreements easier to reach, Feiks confirmed. “This subsequently contributes to better planning certainty for our customers,” he said. Further, cargo-partner aims to reach “realistic agreements” with its carrier partners in November and December for 2023, Feiks said. He further noted that it is important to “work quickly and flexibly” in the interest of customers. Capacity agreements to niche markets like Africa, India and some connections to Latin America are challenging to secure, Feiks added. Varying contracts, changing rates Flexibility or shifts in carrier-forwarder agreements, however, may also depend on contract types. “There is no change in the contractual model,” Audrone Keiynte, chief executive of ACMI carrier Bluebird Nordic and parent BBN Cargo Airlines Holdings, told Air Cargo World . “Depending on the client, there are certain contracts with a certain period, there are contracts with some specific conditions for termination, and there are also limited contracts … so there are different contract types.” Regardless of potentially shifting agreement parameters, carriers and forwarders continue to solidify agreements through peak season. BBN, for instance, has “no available aircraft until the end of the year, even with new [aircraft] inductions,” Keiynte said. On the other hand, falling airfreight rates offer new opportunities. “Some industries, such as perishables, semi-finished goods or non-electronic technical products, could show interest in airfreight again due to lower transportation costs,” Feiks said. “The price level has been very tense and comparatively high in the past two years; thus, lower rates could make airfreight more attractive again for these sectors.” Join Air Cargo World for our next webinar, "Dangerous goods in focus: Shoring up air cargo logistics," on Tuesday, Nov. 15, at 11 a.m. ET. Click here for more information and to register .

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