Price war keeps air cargo rates below natural level

News Snapshot:

Amid a burgeoning price war, pessimism is growing in air cargo circles that a market in prolonged recession could drift further downward, after a short pause, reducing the chance of a modest recovery during the traditional preholiday shipping rush. Logistics professionals had hoped for an upturn by now that would steadily build into the second half, but that hasn’t happened. Freight forwarders and, increasingly, cargo airlines have responded by chasing volumes without regard to cost, which observers say is accelerating a decline in rates. Aggressive price discounting, and reports that some carriers are shelving older aircraft, suggests companies are increasingly...