Global transport and logistics provider DSV has released its latest market outlook, projecting that air cargo volumes and capacity will remain flat in 2024. While the global air trade is expected to normalize by 2025, the supply-demand balance could face ongoing pressures due to several market dynamics.
E-Commerce and Supply Chain Shifts
DSV noted that the unprecedented growth in air cargo volumes seen this year was driven by surges in e-commerce activity and a modal shift caused by the Red Sea shipping crisis. However, future e-commerce growth is expected to moderate as markets reach saturation, and stricter customs and compliance measures, such as potential changes to US de minimis rules, could increase complexity and costs.
The forwarder also highlighted that supply chains are adapting to the disruptions caused by longer sailing times due to vessels diverting around southern Africa. As companies become better equipped to handle these challenges, DSV expects a gradual return of volumes from air to sea freight, contributing to a rebalancing of modal share.
Capacity Constraints and Market Pressures
In terms of capacity, DSV reported a 7% year-on-year increase in 2024, which lags behind the double-digit volume growth recorded this year. The outlook for 2025 remains constrained due to production delays at Boeing, limiting deliveries of the 777-200 freighter. Furthermore, new-generation freighters are not expected to enter the market until after 2026, and existing freighters are already operating at maximum flight hours.
Cargo load factors remain high, leaving no room for further optimization. DSV cautioned that flat or declining capacity, coupled with potential demand increases, could stress the market further.
“Capacity is expected to remain flat and possibly decline as older aircraft are retired due to age restrictions,” DSV stated. “Any increase in demand will put additional stress on the market. However, if demand falls, operators may park aging aircraft to balance supply and demand.”
Looking Ahead
Despite current challenges, DSV remains focused on navigating evolving market dynamics and supporting its customers with innovative supply chain solutions. The company anticipates a more balanced market environment by 2025 as global air trade continues to stabilize.