DHL: Demand down but hope as inflation expected to ease

DHL Global Forwarding’s December 2022 ‘Airfreight State of the Industry’ report painted a fraught operating landscape but the outlook isn’t entirely gloomy.

Following November’s low volumes, demand continued to remain reduced on most trade lanes and is likely to continue into 2023, said the report.

DHL said that e-commerce shipments only added “negligible growth” to global volumes at the end of the year.

The company stated that “any expected volume increase is likely to occur ex-Asia Pacific prior to Lunar New Year”.

Reduced ocean freight rates are seeing shippers turn from air to sea shipments, it added.

Additionally, rates worldwide are below their level against last year despite the effects of higher fuel prices.

Although, recent analysis released by CLIVE Data Services indicates that while the spot rate dropped, average rates for December remained 75% above the pre-Covid level.

The report did note that while inflation will continue into 2023 it is likely to decrease.

Global inflation began climbing as economic pressures started to bite last year, but the International Monetary Fund (IMF) said the inflation rate is set to drop.

“Global inflation is forecasted by IMF to decline to 6.5% in 2023 and to 4% by 2024,” said DHL.

In the first quarter of 2023, DHL expects to see low but stable demand, with high inventories and low sales.

“Demand [is likely] to increase only as countries start recovering from high inflation,” said the report.

Increased belly and freighter capacity does mean that overall, capacity is sufficient to support current demand levels.