Air freight traffic expected to triple in 20 years
There’s hope on the horizon for struggling airline cargo divisions.
According to the Airbus 2011-2030 Cargo Global Market Forecast, air freight traffic is expected to nearly triple over the next two decades. Those volume increases will lead to an increased industry capacity which is expected to double over the same time period.
To deal with that surging demand, the report estimates that the air freight market will require 834 additional aircraft. Many of the new planes put into the air freight industry will be mid-sized freighters, which include the Airbus A330-200F.
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Many of those new planes will be utilized in the world’s emerging markets, which include growing economies in Latin America, Southeast Asia and Africa.
“Air cargo’s development is being driven by these emerging regions, where population migration and middle class growth creates the demand for food and other perishables,” Airbus senior vice president Christopher Emerson at the Dubai Airshow said.
“The operational requirement is to carry this type of cargo over longer-range routes of approximately 4,500 nautical miles in order to reach the population areas.”
Increased shipping and cargo numbers are generally a sign of sustained economic growth. Emerging nations can expect a higher standard of living if air cargo traffic takes off the way Airbus is anticipating.
UPS Posts Record Second Quarter with Revenues of $23.4bn
Growth across each of its core segments resulted in record results for UPS in the second quarter, with group revenues climbing 14.5% year on year to $23.4bn.
The global logistics outfit achieved consolidated operating profit of $3.3bn, up 47.3% compared to the same period in 2020. It is the second consecutive quarter of record profit, and a significant rise on Q1’s $2.9bn.
UPS Q2 Revenues in Brief
- Consolidated revenues: $23.4bn (+14.5% yoy)
- Domestic: $14.4bn (+10.2%)
- International: $4.82bn (+30%)
- Supply Chain Solutions: $4.2bn (+14.3%)
The US company’s domestic segment performed steadily with 10.2% revenue growth to $14.4bn. But it was its international and supply chain solutions segments where UPS saw the biggest gains. Strong demand in Europe led an increase in international revenues of 30% to $4.82bn. UPS’ supply chain solutions division saw revenue growth of 14.3% to $4.2bn, driven, the company said, “by strong demand in nearly all businesses”.
UPS’ steady growth throughout the pandemic has been led by the overarching vision of its chief executive Carol Tomé to do “better not bigger”, focussing on efficiency and high margin deliveries through its network over pure scale and volume.
“I want to thank all UPSers for executing our strategy and delivering high service levels, which fuelled record financial results in the second quarter,” she said. “Through our better not bigger framework, we are moving our world forward by delivering what matters.”
UPS Completes Sales of UPS Freight
The second quarter also saw UPS complete the divestiture of UPS Freight in a deal worth $800m - with a surprise result for the division, now called TForce Freight, under new owner TFI International.
“The second quarter was historically significant for TFI International, with the closing of our UPS Freight acquisition and record performance across the board,” said Alain Bédard, chairman, President and Chief Executive Officer, TFI International. “Particularly gratifying is the performance of TForce Freight, which has exceeded our operating ratio targets far ahead of schedule, and we have only just begun our work.”
In it first two months of ownership TFI reported that adjusted operating ratio (OR) was 90.1% for TForce Freight, far outperforming its forecasted OR of 96-97%.
“I wish to thank our entire team for their hard work and remarkable efforts, and officially welcome aboard our new TForce Freight colleagues who have seamlessly come under the TFI umbrella and are already making stronger than expected contributions,” Bédard added.