As passenger traffic is picking up pace, belly capacity has been increasing. And, along with that, ocean shipping disruption is also on the rise. When asked about their combined impact on the use of freighters, Kuehne+Nagel CEO Detlef Trefzger said that K+N is expecting freighter capacity to continue to dominate the airfreight market for the coming quarters, while it also has no concern about reports of high inventory levels in the US.
He cited that the passenger movement via air has been on the rise lately more due to the summer season globally. However, as winters approach, the belly capacity will be reduced and some of the major markets are not offering a free entry into the country, like China, which also limits the amount of belly capacity into one of the strongest or most important markets.
On another positive note he said that high inventory levels in the US don’t worry him as restocking of inventories is a process that had been helping to drive air cargo demand. He also mentioned that rising online presence of brands as a result of global e-commerce growth has pushed the sellers to stock up their inventories.
While the larger retailers became cautious due to the supply chain disruption and have increased their inventory levels, we don’t see a major difference because small- and medium-sized accounts all of a sudden start to build up their inventory as well.”Detlef Trefzger, CEO, Kuehne+Nagel
Trefzger was speaking after announcing the company’s Q2 results. K+N’s air division’s Q2 net turnover was SFr3.2bn, up 37% from the same period of 2021, Earnings Before Interest and Tax (EBIT) was SFr401m, 65% up year on year and air volumes improved by 2.7% to 570,000 tonnes.