Angus Hind, Director for Europa Air & Sea shares his top four predictions for the air freight industry in 2023.
Europa Worldwide Group
Europa Air & Sea is part of Europa Worldwide Group a rapidly expanding, privately-owned transport and logistics operator. Europa Air and Sea was established as a separate division in 2015 and has gone from strength to strength, expanding across the UK and overseas. It already has a presence in Hong Kong, Dubai and Shanghai.
“2022 has been challenging for many industries around the globe, and the air cargo market has been no exception. With ongoing external issues, the sector has faced challenges across the board.”
The outside world
“External issues will continue to be one of the key challenges in the air freight industry come 2023. Strikes across multiple industries will have a knock-on effect within the logistics sector, meaning that businesses need to have rigid contingency plans and policies in place to protect not only themselves, but their customers too.
The war in Ukraine is still creating uncertainty, and we are yet to see what the real impact of this will be on the industry. However, with no-fly zones sanctions and increasing costs due to route diversions, the war will continue to present a significant number of obstacles.
The ongoing conversation around energy and oil prices is expected to plateau in H2 of 2023.
Like everyone facing cost of living ramifications, a drop in oil and energy prices should positively impact customers as businesses lower fees in correlation with fuel prices.
As we know, the cost of living is one of the key issues that consumers as well as businesses are having to face. With financial decision makers across all industries looking to tighten their belts, ensuring that the movement of goods and use of freight services remains smooth will be an ongoing issue.”
Finding the supply & demand balance
“The global appetite for cargo will continue to decrease in line with 2022 for H1 of 2023, with the cost of living being one of the key drivers. Coupled with the fact that sea freight rates are down by 85% for the last year.
Rates are one of the key drivers that will see the market balance out, and by H2 of 2023 we should start to see costs decrease gradually in line with supply and demand, as the uptake in passenger planes increases. While we will always see spikes in freight consignments around big holidays, such as Chinese New Year and Golden Week, freight volume is still expected to be lower compared to the previous two years, due to worldwide demand not being as high.”
Information in real-time
Looking to 2023 and beyond Angus continues, “although air freight service’s uptake is still not as high as it was pre-Covid, customer expectations have changed.
Operating in a world where we have become so accustomed to having instant access to information at the touch of a button, as we move to 2023, customers will want to have the option to track and locate cargo in real time. Customers will want to access online portals to quote, track and book shipments at origin. This is a trend we will see increase exponentially, as well as one that many businesses including Europa Worldwide Group will introduce.”
Expanding the footprint
Research has revealed that 80% of UK businesses that trade overseas plan to grow their global footprint in the next five years, an opportunity with huge potential for the air freight industry.
“With many major routes not operating daily due to geographical feasibility and financial viability, 2023 could be the year that further afield aviation routes are finally explored.
As a business, we will also be expanding our physical office presence, opening new offices in Delhi and Rotterdam, in the coming months with more to follow.”
Europa Worldwide Group is an ambitious independent logistics operator with three divisions – Europa Road, Europa Air & Sea and Europa Warehouse and has featured in The Sunday Times Top Track 250 for the third time and employs over 1,300 across the UK, Dubai, Shanghai and Hong Kong.