Following CMA CGM’s recent venture into the world of air freight and Maersk’s re-entry into the business, MSC (Mediterranean Shipping Company), the world’s largest container shipping line announced in September 2022 that it was developing an air cargo solution in response to market demand.
In line with this announcement, Boeing delivered MSC’s first branded aircraft, a B777-200 Freighter that will fly on routes between China, the US, Mexico, and Europe.
Announcing delivery of the B777-200, Jannie Davel, the newly appointed Senior Vice President Air Cargo at MSC, said “Our customers need the option of air solutions, which is why we’re integrating this transportation mode to complement our extensive maritime and land cargo operations. The delivery of this first aircraft marks the start of our long-term investment in air cargo.”
He said: “Since I started at MSC, I have spoken to numerous partners and customers right across the market and it is very clear that air cargo can enable a range of companies to meet their logistics needs. Flying adds options, speed, flexibility and reliability to supply chain management, and there are particular benefits for moving perishables, such as fruit and vegetables, pharmaceutical and other healthcare products and high-value goods,” said Davel in a statement on MSC’s website.
“We are delighted to see the first of our MSC-branded aircraft take to the skies and we believe that MSC Air Cargo is developing from a solid foundation thanks to the reliable, ongoing support from our operating partner Atlas Air.” added Davel.
The Boeing B777-200 will be operated by Atlas Air, Inc., a subsidiary of Atlas Air Worldwide Holdings, Inc. (Nasdaq: AAWW), supporting MSC on an aircraft, crew, maintenance, and insurance (ACMI) basis.
This delivery marks the first of four B777-200Fs for which orders were placed by MSC said to provide dedicated capacity to support the ongoing development of the business.
Air cargo demand on a downward slope
MSC’s delivery however comes at a time when IATA’s September 2022 figures reveal that demand for global air cargo has decreased.
As per IATA, “Worldwide demand, measured in cargo tonne-kilometers (CKTs), fell by 10.6% compared to last year. International operations were also down 10.6% but remained close to pre-pandemic levels. Air freight capacity, meanwhile, was up by 2.4% over September 2021 but still below pre-pandemic levels.”
Accenture recently reported that global international air cargo capacity was down -2% on Oct 10-23, 2022 compared to Oct 7-20, 2019. As per the report, Ocean shipping lines MSC, Maersk, and CMA CGM doubled their capacity in air freight in 2022 while integrators added ~5x more capacity than ocean shipping lines YTD.
Will MSC’s Air Cargo solution be able to replicate the success of its ocean shipping business, remains to be seen considering the reduction in air cargo demand currently.