Damco: airfreight set for improvement in second half

[In 2019] the market has clearly gone down and there are multiple reasons for this, one of the significant ones being the uncertainty generated by the US/China trade war, writes Ferwin Wieringa, global head of airfreight, Damco.

In addition, since consumer demand has also reduced this year, airfreight has not increased in the retail and fashion vertical, hence ocean freight as main mode of transport could fulfil largely the supply needs of these consumer goods.

In the European region, some of our customers have been choosing to go back to airfreight instead of rail, because constraints on the supply side, as well as technical issues, have been causing problems for rail transport.

Looking forwards to 2020, we expect to see a little bit of growth in airfreight, picking up especially in the second half of the year.

E-commerce demand will continue to grow as consumer spending power increases in regions like India, China and Africa, buoyed by increasing access to internet-based devices and services.

Despite the overall downturn in consumer demand in the US and Europe, the shift from high-street shopping to online will contribute to the increase in airfreight volumes in 2020.

Pharma and perishables will continue to grow as the markets mature, but we expect stagnation in the retail and fashion sectors, mainly because of the trade war, slowing demand, and the fact that the supply chain in these verticals can still be managed in terms of ocean freight.

In 2020, we will be taking advantage of these opportunities and challenges with a pro-active strategy for airfreight, bringing a new business focus in targeted areas with new products and service offerings.

However, for there to be really positive growth in the airfreight market, there needs to be a definitive resolution to the US/China trade war.

Damco will continue to develop our digital capabilities, online booking options, and rate availability to rapidly adjust to the needs of our customers.