2024 was a better than expected year for air cargo, according to many stakeholders in the industry. E-commerce and Red Sea-related sea to air demand helped push up volumes, although there were also plenty of challenges throughout the year.
Not unexpectedly, the sale of DB Schenker, a milestone e-commerce flight and Red Sea shipping crisis-related air cargo demand were amongst the top stories on Air Cargo News‘ website last year.
12. Air Canada Cargo strikes
Air Canada Cargo was bracing for potential pilot strike action in September after talks over pay and conditions broke down at the end of August. Later that month, the airline had said cargo operations were under threat and it was “finalising contingency plans to suspend most of its operations”. A reprieve for Air Canada came in October when pilots approved a new collective agreement between the airline and the Air Line Pilots Association (ALPA) union.
11. Hong Kong is top
Provisional figures released by Airports Council International (ACI) in April showed Hong Kong International Airport (HKIA) retained its position as the world’s busiest cargo airport in 2023, while US hubs reported some of the largest declines amongst the world’s top 10 freight hubs. HKIA registered a 3.3% year-on-year increase in cargo volumes in 2023 to 4.3m tonnes. It was the 13th time since 2010 that HKIA has been the busiest cargo airport in the world.
10. Planning for the peak
Shippers were urged by Xeneta and TIACA in August to secure space and make contingency plans as they were warned the air cargo market faced capacity shortages out of key Asian markets during the peak season. Shippers were told capacity was expected to get tighter during the peak due to the usual rise in general cargo volumes, the ongoing surge in e-commerce and the continuing disruption to ocean shipping. In anticipation of tight capacity and high rates, shippers had been securing longer term deals, blocking space, using index-linked contracts, securing rates and planning for different eventualities.
9. Amazon sells own capacity
Amazon Air caused a stir in October when it confirmed that it has begun to sell cargo capacity on its aircraft to third parties. The carrier said it would serve domestic networks across North America, Europe, the Middle East & Africa (EMEA) and Asia and would be able to carry general cargo, pharmaceuticals, perishables, dangerous goods and parcels with its fleet of Boeing 737, Boeing 767 and Airbus A330 aircraft. Amazon said it could provide space on more than 100 aircraft with more than 250 daily flights, including partner airlines, and would also offer ad hoc, charter, or blocked space services.
8. Tougher rules for European shipments
Both Canada and the US implemented stricter security requirements for Europe- and CIS-based air cargo shippers importing goods last year, catching some companies by surprise. The US Transportation Security Administration (TSA) and Customs and Border Protection (CBP) issued cargo security directive 1544-24-02 in mid-August, while in September, the Canadian government also brought in new requirements. Air Canada Cargo warned shippers that they faced an embargo if they did not meet the requirements and that Transport Canada had issued an immediate mandate that all cargo arriving from a list of 55 largely European countries must not be accepted from shippers without an established business relationship with either Air Canada Cargo, their freight forwarder, their known agent, or that are a known consignor.
7. Red Sea crisis pushes up air demand
Shipping companies rerouted vessels away from the Suez Canal in Egypt at the end of 2023 following attacks by Houthi Militia on container ships in the Red Sea, off the Yemen coast. Increased transit times, prices and concerns about supply chain delays and congestion then resulted in elevated interest in airfreight, with Bolloré Logistics suggesting in January that the situation would squeeze airfreight capacity. Meanwhile, the conflict created an opportunity for increased air cargo charter business as shippers and forwarders looked to secure alternative transport for at-risk shipments.
6. Top 25 cargo carriers in 2023
Air cargo demand in 2023 was slow to recover from the previous year’s market slump and the top 25 cargo airlines felt the strain, as our report on the top 25 cargo carriers in 2023 showed. It was undoubtedly a tough year for air cargo with global full-year demand for the top 25 airlines down 1.7% compared to 2022 as inflationary pressures put the breaks on consumer spending. FedEx hung onto the top spot, although it suffered an 8.3% drop in volume to 17.9bn CTK.
5. FedEx pilots pay dispute
At the beginning of last year, FedEx pilots expressed their disappointment over talks regarding a new contract as the airline was embroiled in negotiations with the Air Line Pilots Association, Int’l (ALPA). Such is the way for these matters, the course of talks did not run smoothly. In 2023, the FedEx ALPA master executive council (MEC) had accepted a tentative offer from FedEx but the deal was then rejected by the pilots during the ratification process. Weaker demand then saw FedEx looking to reduce pilot numbers, with methods including encouraging pilots to move to regional passenger carrier PSA Airlines. Contract negotiations began in 2022 and remain ongoing.
4. Top 25 forwarders in 2023
Our annual summary of the top 25 air forwarders was our fourth most read story of 2024. Data revealed Kuehne+Nagel (K+N) maintained its position as the world’s leading airfreight forwarder in 2023 ahead of DHL Global Forwarding, despite overall market volumes coming under pressure. Figures produced by consultant Armstrong and Associates show that K+N saw its cargo volumes decline by 11.2% year on year to 2m tonnes – a trend reflected by many of its top rivals.
3. First dedicated e-commerce flight
E-commerce was rarely off the airfreight industry news radar last year and so it stands to reason that the first dedicated e-commerce flight into Glasgow Prestwick Airport (PIK) generated much interest. The December flight was chartered by Zhonger Express and Jumen Logistics and operated by Silk Way West Airlines Cargo. The freighter carried a 90-tonne consignment of products from e-commerce platforms Temu and TikTok for Royal Mail final mile deliveries.
This inaugural e-commerce flight took place as PIK worked towards scheduling regular e-commerce flights for this year and set its sights on expanding operations in Asia, most recently appointing a dedicated sales representative in China. Analysts suggest e-commerce may have reached full steam, with obstacles in the way of further growth. Time will tell.
2. Sultan switches to passengers
Nabil Sultan’s decision to leave his role as Emirates SkyCargo divisional senior vice president to switch to the airline’s passenger business also hit the headlines in February. Sultan had worked for Emirates for over 33 years and in a decade of heading up the cargo business he had successfully helped Emirates SkyCargo grow.
In recent years, his efforts had included steering the business through the challenging pandemic years, and the period of lower air cargo demand that has followed. Sultan took on the role of executive VP – passenger sales and country management at Emirates in March, with Badr Abbas taking on his former role in July.
1. DB Schenker sale
Unsurprisingly, the acquisition of German freight forwarder DB Schenker topped the list of ACN’s most read stories last year, following speculation about the sale that lasted years and with over 20 companies interested in buying the forwarder.
Looking to reduce debts, Deutsche Bahn announced that DB Schenker was officially up for sale in December 2023 after spending a year mulling its options. In September, Danish forwarder DSV confirmed it had signed a deal with state-owned railway firm Deutsch Bahn to buy DB Schenker for for €14.3bn. The deal has created the world’s largest freight forwarder in terms of both volumes and revenues.
The process wasn’t made easy with union opposition and a reported attempt by rival bidder CVC to persuade Deutsche Bahn to change its mind with an increased bid. However, DSV said it would invest €1bn in the firm’s German operations over the next three to five years. DSV expects to close its acquisition of DB Schenker from Germany’s Deutsche Bahn in the second quarter of 2025. Stay tuned for updates.
