The use of all-cargo passenger aircraft or “preighters” is unlikely to meet increased air cargo demand during the peak season.

Bruce Chan, vice president of global logistics at investment bank Stifel, wrote in the Baltic Exchange monthly market review that difficulties in ocean shipping, high ocean pricing, and continuous air cargo demand were placing capacity under strain.

He said some have pointed to the inflow of passenger-to-freight conversions — which have been dubbed preighters — to provide incremental capacity.

Temporary solution

“But these are insufficient to meet the demand, in our view, and they address the symptoms of the problem, not the root cause,” Chan said. “Ultimately, these conversions are temporary, and will only be deployed in the tightest of markets when rates are beyond a certain threshold, only to be pulled back when those rates decline.”

“Widebody belly capacity is still in the high-teens to low twenty percent range below where it was in 2019, depending on the lane, in our view — and demand is for the most part much higher now than it was in 2019,” he added.

Capacity from widebody passenger planes is seen to take up around 30% of the total market.

“With the seasonal ramp toward the fourth quarter holiday peak in full swing and apparent momentum in spending on consumer goods, retail inventory to sales ratios are still near record lows, On peak season expectations,” Chan said regarding the peak season.

“Anecdotally, one large retailer said that even if it shut down all of its stores and just focused on replenishing inventory backlogs, it would still take months before things were back to normal. So shippers are fighting to play catch up in addition to meeting robust new demand, in our view,” he added.