Freighters are here to stay, hints Kuehne+Nagel CEO Detlef Trefzger

Post By : Karvi Rana
Post Date : July 29, 2022
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Kuehne+Nagel (K+N) is anticipating that freighter capacity should keep on overwhelming the airfreight market for the approaching quarters, while it likewise does not worry about reports of high stock levels in the US.

Talking after declaring the organization’s second-quarter results, Detlef Trefzger, CEO, Kuehne+Nagel was asked about the impact of the return of belly capacity and, at the same time, rising ocean shipping disruption would have on the utilization of freighters.

Trefzger expressed that right now the air freight market was adjusted 65% to 35% in favour of freighters and he doesn’t anticipate that this should change.

“I don’t see a major change in the next couple of months or quarters,” he said. “For the reason that now is the peak season for passenger planes, even intercontinental, as the summer vacations are kicking in almost everywhere globally.

“But for the winter season, 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 our strongest or most important markets.”

Trefzger, also said, he expects a peak season this year, although he added “how much of a peak season remains to be seen”.

He further expressed that he wasn’t much concerned in regards to the reports that many US companies are reporting excess inventory levels – restocking of inventories is a process that had been helping to drive air cargo demand.

Trefzger said now with larger retailers fully stocked, small- and medium-sized companies would also be looking to build up 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,” he said.

He added: “We see a positive outlook for small- and medium-sized enterprises.”

Brands are now gaining e-commerce market share from online marketplaces and would need to build up inventories to meet this extra demand, he further added.

The air division’s second-quarter 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.

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