Cargo activity is continuing to boom despite slower January growth, with DHL Express placing an order for six additional Boeing 777Fs, Air Transport Services Group (ATSG) inducting its first A321 conversion and Ethiopian Airlines agreeing to a new multimodal air-sea partnership with two companies in Djibouti.
IATA Director General Willie Walsh said January cargo demand fell below expectations, with just 2.7% growth compared with 9.3% in December 2021.
“This likely reflects a shift towards the more normal growth rate of 4.9% expected for this year,” Walsh said March 9. “Looking ahead, however, we can expect cargo markets to be impacted by the Russia-Ukraine conflict. Sanction-related shifts in manufacturing and economic activity, rising oil prices and geopolitical uncertainty are converging. Capacity is expected to come under greater pressure and rates are likely to rise. To what extent, however, it is still too early to predict.”
Cargo demand is now tracking above pre-pandemic levels, although capacity remains constrained. Meanwhile, the inventory-to-sales ratio remains low, meaning that manufacturers may turn to air cargo to rapidly meet demand.
Against this growth backdrop, Deutsche Post-owned DHL Express is modernizing its fleet with an order for six more 777Fs. This latest agreement takes DHL Express’ total historic 777F orders to 28 aircraft, since it placed its first direct order with Boeing in 2018. The carrier has taken delivery of 15 777Fs to date.
Meanwhile, ATSG leasing subsidiary Cargo Aircraft Management has begun its first Airbus A321 freighter conversion, which will be performed by its Florida-based sister company PEMCO Conversions.
“The induction of this aircraft is significant, because it encapsulates the execution of our strategy to offer 360 degrees of service for the aircraft we lease,” ATSG President and CEO Rich Corrado said. “We are able to purchase a passenger aircraft, convert it to freighter configuration in-house using the supplemental type certificate (STC) developed through our [321 Precision Conversions] joint venture, then lease it to a customer, along with options for ongoing maintenance support, ground support and airport operations.”
Ethiopian Airlines has also been further developing its cargo business, agreeing to a new strategic partnership with International Djibouti Industrial Park Operation (IDIPO) and Air Djibouti.
The aim of the agreement is to streamline cargo flows between China and Africa. Chinese cargo will arrive by sea into Djibouti and then carried by air from Djibouti International Airport. Ethiopian will then distribute the cargo throughout its African network.
Ethiopian Group CEO Tewolde GebreMariam said this has led to the creation of a new multi-modal logistics product, called Sea-Air-Modal (SAM).
Africa is home to 1.3 billion people, creating a huge potential market, and China is Africa’s largest trading partner with a trade volume of $254 billion in 2021.
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