Competitive rates in the air freight sector are set to continue with the market forecasting little change in 2020. According to Kirsten Todd, commercial manager at Groupair, there will be continued pressure on companies that are already having to chase every kilogram to offer competitive levels of service. “We have managed to keep our air freight export rates constant and in some instances have reduced rates from Johannesburg during the current peak season,” she says. Traditionally, airlines try to increase rates during this period to boost revenues. “In addition to this,” says Todd, “during the past two peak seasons we have experienced airlines upselling to certain destinations.” She says capacity from South Africa has increased, forcing airlines to fight for cargo. “We do, however, expect that some pressurised routes will be upsold by the airlines before the end of November.” According to Todd, export volumes have remained buoyant, allowing the company to take advantage of the current available capacity and pass these savings on to their customers. “Volumes into Africa are still increasing with demand to traditional East and West African destinations making up the bulk of the cargo. With the recent introduction of our export express service, we have given our customers an alternative for the smaller door-to-door consignments too.” But, she says, air freight import cargo volumes have not kept pace with export volumes. “Although there is capacity into South Africa on the traditionally congested routes, demand appears to remain flat. The tight economy and high exchange rates are definitely coming into play,” she says. “Shipment sizes have also reduced over the past couple of months and customers appear to be very rate driven.” Having introduced an import express service for smaller consignments, Todd says shipments have moved from an airfreight service to an express service instead.
INSERT: Volumes into Africa are increasing with the biggest demand to traditional East and West African destinations. – Kirsten Todd