A mini-poll over on our CargoForwarder Global LinkedIn page regarding the outlook for this year, throws up a mixed bag of responses. A clear 50% believe that 2023 will not be a record year, and just under a third expect similar results to 2022. One in eight is positive that 2023 will indeed be a record year, while one in ten throw their hands up in the air and respond, “who knows?”.
Who knows, indeed? After turbulent pandemic years followed by Russia’s illegal invasion of Ukraine in FEB22, the world is grappling with inflation across the board. IMF’s Managing Director, Kristalina Georgieva, warned in a CBS program last week that because the world’s three largest economies – the US, EU and China – were now all slowing down simultaneously, “we expect one-third of the world economy to be in recession,” and even in those countries that are not in recession, “it would feel like recession for hundreds of millions of people.” The world’s second largest economy, China, which recently dropped its zero tolerance Covid regulations in an unusual and unexpected response to rising demonstrations, is particularly feeling the pinch. “For the first time in 40 years, China’s growth in 2023 is likely to be at or below global growth,” Georgieva pointed out.
Nevertheless, the IMF still predicts global economic growth of 2.7% for 2023 (compared to 3.2% in 2021, and 6% in 2020) – slowed down growth, but positive growth all the same. Within the air cargo industry, rates have also been decreasing as more capacity comes on the market and the sea freight situation normalizes, but, on average, they still remain significantly above pre-pandemic levels, bringing in healthy revenue and setting the foundation for further investments. Those investments are seen in fleet growths, the construction of state-of-the-art warehouses across the world, the expansion of networks, and – noticeably – in the number of open positions on offer within the industry.
A continued focus on Sustainability, Digitalization, and Innovation
The progress that has been made in both sustainability and digitalization in the last few years, will continue in 2023. SAF production and flights are on the increase, and efforts to achieve the ever-approaching 2050 Net Zero emissions are producing both creative solutions and regulatory measures: Lufthansa Cargo's Sharkskin initiative, and the growing number of airports banning or penalizing four-engine aircraft, are just two examples. TIACA's BlueSky program meets the growing public pressure and industry mindset change with regard to environmental measures. Many companies, too, are realizing the efficiency benefits of digital processes and big data, not only in facilitating internal processes through automation, but also in highlighting more sustainable choices. CargoAi's Tech for Good move is a case in point. 2023 will no doubt see more "Green Tech" emerging.
On the innovation front, work is still continuing on the commercial launch of cargo drones as well as the lesser-perceived airships - just last week, for example, (on 05JAN23), French airship company, Flying Whales, signed a Letter of Intent with the aerospace company, ArianeGroup, regarding research into possible use cases of its LCA60T airship in transporting Ariane 6 spacecraft components, bringing the reality of an airship decade even closer.
While Flying Whales is on track to go live in 2026, its Russian peer, Aerosmena, which had planned to launch its cargo airships in 2024, is no longer on track. Had Putin not forged ahead with his deluded activities, Russia’s Aeroflot – one of the world’s oldest operating airlines - should have been celebrating its centenary year this year. It had published ambitious plans back in 2018 to carry 100 million passengers in its 100th year, though will be far off the mark given its restricted operations since the sanctions last year.
Industry associations such as AfA over in the U.S., or TIACA, though expecting a rough first half-year, are optimistic for the long-term. A view that is also held by various airlines and GSSAs, too: Lufthansa Cargo and Strike Aviation as cases in point, are confident that the second half of 2023 will see better times. The resilience, agility and collaboration brought about by the pandemic, stand the industry in good stead to also weather the latest challenges.
Having recently read about Amazon now planning to market its extra air cargo capacity in an effort to combat the slowdown in ecommerce growth in 2023, my personal interest for this year is to see which of the online platforms, cargo.one, CargoAi, or WebCargo will first bag Amazon as their latest airline partner. What do you think?