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Pay more or risk 'an awful lot of cherry juice': the perishables airfreight squeeze

Perishables shippers have limited room to absorb rising airfreight costs, airlines have warned, raising questions over how long some products can remain commercially viable to fly. While booming demand for AI infrastructure supports higher freight spending, flower and fruit exporters face a harder ceiling: what consumers will pay for their products. "Perishables are a very low-margin business, in which there is only so much the consumers will pay," Fred Ruggiero, Cathay Cargo's VP cargo for the Americas, told The Loadstar at TIACA's Air Cargo Forum in Miami. Avianca Cargo CEO Diogo Elias highlighted the difference between customers shipping AI servers and "paying whatever", and flower exporters with much less scope to accommodate higher transport charges. He pointed to WorldACD figures showing Latin American yield increases of around 7% to 8%, against 24% to 25% globally, illustrating the region's difficulty passing on higher fuel costs. Atlas Air chief commercial officer Martin Drew warned that sustained cost increases could eventually push some commodities out of airfreight. "The longer it continues, what you start to worry about is ... price elasticity, where you get to a point where it's just no longer viable to send by air cargo," he said, citing some perishable products as potentially vulnerable to modal shift. Yet sea is not always an option. For seasonal produce, a delayed harvest can eliminate the time available for an ocean journey, leaving exporters needing airfreight precisely when their plans have become harder to execute. "As a result of the weather, the harvest may be delayed. That means it's going to miss the fast boats, so more has to be transported by air," said Mr Ruggiero. For Cathay, getting South American cherries to Asian consumers involves coordinating capacity across several carriers and gateways. "Transporting cherries from Chile through Miami, Los Angeles, or New York and onward to Asia is a complex journey where speed and temperature control are essential," he explained. "The product needs to move quickly, remaining at the optimal temperature throughout the journey. Otherwise, you're left with an awful lot of cherry juice." Those movements are organised well ahead of the harvest, with interline charter capacity feeding Cathay's network. "We have charters lined up with interline carriers from Chile to Miami or Chile to Mexico, so we can get them out to Asia," said Mr Ruggiero. "The problem is, if it's all planned in advance and everybody is ready to go, what happens if the crop gets delayed? There's a lot of communication involved amongst ourselves, the forwarders, the growers, and even down to the farmers." One air cargo executive described the precarious economics of a business in which a year's work could be threatened by rain at the wrong moment, adding: "I don't think I'd ever want to be in that business." Securing lift is another challenge. Cathay reported capacity shortages both from Asia to the US and within Asia. "So we're trying to secure additional capacity within the region," said Mr Ruggiero. Once space is booked, the handling requirements leave little room for improvisation. Treating all fresh produce alike can undermine the value of an expensive air journey. "On the handling side, it takes expertise to handle perishables properly, and every type of perishable is handled slightly differently," he said. "For example: how cold they can be, how much humidity they can withstand, and whether they can be covered or not." For forwarders, that means managing several moving targets - the harvest, connecting flights, handling conditions, and a freight bill the customer can afford. A delayed crop can require a faster journey, but it does not necessarily give the grower more money to pay for one.

DHL Forwarding: Market wide growth hides air cargo pressure points

The overall growth in air cargo demand registered so far this year risks creating a misleading picture of performance on individual trade lanes, according to DHL Global Forwarding's head of airfreight. Writing in an online column, Henk Venema, executive vice president, global airfreight, DHL Global Forwarding, urged customers not to use the global air cargo growth average as a proxy for the corridor that matters most to their supply chain. "The pressure points sit on specific lanes, and those are likely to remain uneven into 2027," he said. Venema pointed out that overall global air cargo traffic grew by 5% year on year in the first eight months of the year, according to IATA. However, certain trade lanes had seen demand soar, putting pressure on capacity as the industry heads into the peak season. Others had seen demand tumble. Venema said that IATA stats show that in August, cargo volumes from Asia to North America were up 15% year on year and Asia to Latin America 23%. In contrast, Asia to Europe fell 8%. The growth on Asia-North America is driven by AI-related demand, while Asia-Europe volumes are suffering as a result of the European Union's e-commerce import charge. Asia to Latin American volumes, in contrast, are fuelled by e-commerce. In response, freighter operators have shifted Asia-Europe capacity to Asia-US and Asia-Latin America lanes. "Carriers choose where to deploy freighters, and the choice usually defaults to the Southeast Asia to US trade," he says. He adds: "The pressure is particularly concentrated on routes from Vietnam, Thailand and Taiwan to the US. I expect that demand to continue into 2027, making these Asian export routes a key capacity issue for shippers." Venema points to statistics showing that approximately 17m metric tons have been moved by air year to date; high-tech cargo accounted for 3m metric tons and grew 22%. Chinese e-commerce represented 2.9m metric tons and remained flat, with other general cargo accounting for the remaining 11.2m metric tons. For shippers, resilience increasingly means understanding where pressure points are and having alternatives ready before disruption hits, says Venema. Capacity outlook Venema added that freighter capacity shortages on certain trade lanes were likely to continue in the future. "Around 20 freighters are expected for delivery on the world market in 2027, with most going to express delivery companies rather than traditional cargo airlines," he said. "Older aircraft will also continue to leave the fleet. Therefore, dedicated freighter capacity is likely to remain in high demand and limited supply for the next several years. "I also expect more partnerships between Middle Eastern and Asian airlines seeking ways to participate in the transpacific market within existing traffic-right constraints." Meanwhile, passenger aircraft additions do not necessarily help the cargo market, as they aren't always deployed on routes where demand is highest and can't carry certain types of cargo.

ATSG completes sale of Omni Air to focus on air cargo

Air Transport Services Group (ATSG) has completed the sale of Omni Air International to enable it to focus more on air cargo and related aviation services. US-based ATSG, which provides aircraft leasing, air transportation, and aviation support solutions, had announced the sale of Omni in September. The provider of passenger ACMI and charter services has been sold to OAI Holdings, a private company with aviation expertise. ATSG's portfolio will now be centred on air cargo transportation, aircraft leasing, and related maintenance, ground and logistics services. "We are pleased to have completed this transaction after having explored strategic options for Omni for some time. We are confident Omni has a bright future ahead as it continues to serve its customers under OAI," said Greg Mays, president and chief executive of ATSG. "ATSG is now sharpening its strategic focus on the significant opportunities in air cargo and related aviation services. "This milestone allows us to accelerate our investment in our core markets and meet the evolving needs of our air cargo and related customers. "We are excited about the opportunities ahead and look forward to continuing to execute on our strategy and deliver for our customers." Financial terms of the transaction were not disclosed.