After two extremely successful years, the logistics provider expects the air freight market to move sideways in 2023. Major breaking factors were already apparent in the second half of 2022, and appear to be continuing, says air freight helmsman, Timo Stroh. He points to the multitude of crises, some of which overlap and do not allow a clear forecast for market development. Due to the increasingly fierce distribution battle combined with a decline in air freight rates, the executive expects that, in forwarding, the wheat will separate from the chaff this year.
The cargo chief leaves no doubt that Dachser belongs to the wheat in air and sea freight. Mainly because his company is competitively positioned thanks to its integrated network capabilities and
the large number of stations worldwide. With its 170 offices, Dachser is able to offer its local and global customers tailored logistics solutions that meet the self-imposed high-quality
standards, the executive illustrates.
In terms of digitalization, the logistics provider has done its homework and has the supply chain “under control,” says Mr. Stroh. When asked what share of the company's total revenue air freight
will account for in 2023, he is cagey. He merely states that his company will again aim for a “satisfactory” end result in the annual financial report.

Self-managed cargo flights
To ensure the delivery of first-class cargo services to its customers, Dachser relies on cooperation with nearly a dozen hand-picked preferred carriers. In addition to North American capacity
providers, these include airlines in the Far East, the Arabian Peninsula, and Europe. The latter includes Germany’s national carrier, Lufthansa Cargo. “Important for us is a large network
coverage and high transport reliability.” However, for the past five years or so, Dachser has increasingly been relying on self-managed cargo flights. Key partner is broker Chapman Freeborn
and its subsidiary Magma Air, as well as the Vilnius, Lithuania-based Avia Solutions Group, i.e. Chapman Freeborn's parent company.

Frankfurt = air, Hamburg = sea
“Our main operations base is Frankfurt, from where we offer our customers scheduled flights to all five continents.” Charter flights make up about 25% of all air transports organized by
Dachser. This primarily concerns products such as pharmaceuticals, fashion, high-tech, or components of the automotive industry including entire cars. “Because we sit in the driver's seat and
control the flights, we have a high level of reliability in air transports, to the benefit of our clients.”
This service is essential in view of the still interrupted supply chains. According to Stroh, air and sea freight now account for one-third of Dachser's revenue, and trucking for two-thirds with
the ratio, remaining relatively stable. As a result, the company's global sea freight department is based in Hamburg, while Stroh and his air freight team manage global operations from Frankfurt.
Road transport is by far Dachser's most important revenue driver, and this is not expected to change.
Relocation of industrial production
For the air cargo business, the executive predicts that capacity supply will exceed demand in the first half of 2023. The decisive factor will be how passenger traffic develops and thus the
amount of belly capacity coming onto the market. “I hope that we don't get back to dumping price levels because of a surge in lower deck capacity in air freight,” he exclaims. At the
same time, he recalls that the high rate level in air freight was also driven by the multiple disruptions in ocean freight.
For the near future, he expects a relocation of industrial production, such as fashion from China to India, and a reactivation of industrial sites in Europe. China remains very important for the
international flow of goods, but “we see a movement of industry to other locations, such as pharmaceutical producers to Eastern Europe,” Mr. Stroh maintains.
According to him, major consolidations are not very likely. However, some smaller forwarders will probably have to give up due to stiffer market conditions. Time will tell.
Heiner Siegmund
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timbwimmer@yahoo.de (Sunday, 08 January 2023 21:57)
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