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AIR FREIGHT STATE OF THE INDUSTRY

APRIL 2023

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Content

1 Summary

2 Market developments

3 Demand

4 Supply

5 Utilization

6 Rates

7 Jet fuel

8 Backup material:
Global capacity development

9 Stay in touch

DHL | Airfreight State of the Industry | Bonn | April 2023 2

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Summary
Demand
• Volumes continued to
remain low
• Low global PMI Index;
higher index for the
emerging markets
• Comparatively low export
orders from ASPA
contributing majorly to
volume decline
• High inflation continues to
affect the world economy
and trade
• Easter holidays reduced
volumes ex-EU, US
• Major economies expected
to show more resilience
against high inflation
towards H2 ’23, recovery
in volumes expected
Capacity
• Remains sufficient considering currently low volumes; belly
capacity following the same cue as passenger travel has
increased
• Ongoing labour disputes likely to have operational impact
Carriers
• Higher flight frequencies in general for increased PAX demand
• Most airlines have available capacity at hand, absorbing low
yields amidst lean volumes
Jet Fuel
• Prices remained higher than normal; > $100/Bbl
• OPEC+ decided to cut production for liquid fuels
• EIA’s forecast for crude oil price increased by $2/Bbl
Rates
• Competitive spot market across most tradelanes;
slight increase in ad hoc and charter rates
• Expect more stability on long term rates
towards H2 2023
Regulation/News
• Schiphol airport flight limit blocked by Dutch
court; no cut in schedules
• Strikes across airports around the globe-
affecting passenger travel and delaying
operations
• Russia, Ukraine crisis continues; sanctions likely
to be in effect

Source: IATA, Seabury, WorldACD Market Data, DGF Desk Research

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Market Developments
• IMF baseline forecast-
Growth to fall to ~2% in
2023, before settling at
Economic Outlook Demand ~3% in 2024.
GDP Growth by Region Demand Development in Tons (% change YoY) • Advanced economies
6 expected to see an
2 especially pronounced
growth slowdown, from
-5
~2% in 2022 to ~1% in
-7 -8 2023
-11 -10 -10 -10
-15 -13 -15 -17
• Demand remained low;
Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
22 23
PMI index for EU, US
mostly remain low; Index
outbound emerging
Supply Jet Fuel markets show
Global Jet Fuel Price $/ bbl improvement
Supply Development (000 Tons) Passenger Freighter Crude Oil vs. Jet Fuel Price (USD per bbl)
Global Crude Oil Price $/ bbl • Overall scheduled
8,468
200 capacity remain sufficient
107
150 to support the current
79
volumes; MoM
33% 100
improvement continues
67% 50
• Jet fuel price remains
0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr Jan- Jan- Jan- Jan- Jan- Jan- Jan- Jan- Jan- Jan- Jan- high
22 23 13 14 15 16 17 18 19 20 21 22 23
• Freight rates remain
dynamic; slight increase
Source: IHS Markit Group, IATA, Seabury, WorldACD Market Data, Economic Data Factbook, IMF
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Demand
• Volumes remain low;
Global Volume Development Regional Volume Development reached pandemic levels
In Tons (% change YoY) In Tons (% change YoY) Dec 22 Jan 23 Feb 23 but YoY comparison showed
a decline
• Easter holidays increased
3 volumes outbound ASPA but
6
1 reduced exports outbound
EU, US
2 0
-2 • The PMI index for the
-3 emerging market has
-5 improved and shows
-6 -6
-7
promise but comparatively
-8 low export orders ex-ASPA
-9 -10
-5 • Index for EU, US indicate low
-12
-7 volumes and remain lower
-8 -15 than last quarter for some
-10 -10 -10 -17 countries
-11 -18
-19 • Higher perishable movement
-20 -17
-13 ex-some African nations
-22
-15 -15 • High inflation and reduced
-17 purchase power contributing
Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar -27 to overall lower volumes
22 23 EURO MIDEAST AFRICA ASPA AMNO AMLA GLOBAL
• No drastic replenishment
needed for inventories

Source: WorldACD Market Data;*I/S- Inventory to Sales ratio; data available till Mar 23 only on global level
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Supply

Global Capacity Development

Global Capacity Development (000 tons) 2021 2022 2023 • Global capacity now +14%
+14%
10,000
vs Apr‘22
• Belly capacity continues to
8,000
grow- YoY ~20% growth as
6,000 passenger travel recovery
4,000 8,229 7,579
8,529 8,468 remains significant
2,000 • Capacity remains sufficient
on majority of tradelanes
0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec • Continuing recovery of the
global PAX market across
all regions
Trade Lane Capacity Development
• Labour dispute and
Lane Capacity Development (YoY % change) All configurations Passenger Freighter shortages in recent times
ex ASPA- 111 113 ex EURO- ex AMNO- ex AMLA- ex MEA-
affecting capacity on certain
67
tradelanes mostly in EU-
58 causing delays
39 33 35
27 23 24 25 27 16 23 22 25 • Ground handling and
13 15 13 20 18 22 13 15 12
20
trucking also affected with
9 11
3 4 3 4 3 3 5 0
ripple effect on air capacity
-12 -9 -8
Intra AMNO EURO ASPA AMNO AMLA -MEA ASPA AMLA EURO AMNO EURO -EURO

Source: Seabury
DHL | Airfreight State of the Industry | Bonn | April 2023 6
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Utilization

Global Cargo Load Factor Development

%-Change CTK and ACTK CTK ACTK
• Sufficient capacity in
20 market; cargo volumes
remain low
0
• Flat volume growth against
-20
improved capacity has led
-40 to reduced load factors in
all regions
-60
2017- 2018- 2019- 2020- 2021- 2022- 2023- − Cargo Load Factor (CLF)
Jan Jan Jan Jan Jan Jan Jan
is an indicator of how
tight is the demand-
Regional Cargo Load Factor Development supply balance
CLF in % (CLF = CTK/ACTK) Feb 21 Feb 22 Feb 23 • The industry-wide cargo
load factor decreased by
80 ~8 Pts YoY in Feb ’23
-8
60 • Utilization is likely to
remain balanced under
40 current demand vs capacity
64 64 57 69
60 53 59 58 53
20 45 48 50 47 46 45 43 40 43 48 36 46 situation

0
EURO MIDEAST AFRICA ASPA AMNO AMLA GLOBAL

Source: IATA; 2023 onwards data is compared against last year

DHL | Airfreight State of the Industry | Bonn | April 2023 7
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Rates-Global Carrier Rate Development

Carrier Rate
Baseline (2022 = 100%) 2023
%
150 • Market continued to
remain aggressive on
most tradelanes, as
demand remained low and
capacity sufficient

• Slight increase in ad hoc

and charter rates

100
• High jet fuel price likely to
affect rates as the prices
can fluctuate amidst the
current market dynamics

• Expect more stability in

long term rates towards
H2 2023
50
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

23 vs 22 %-change (2022 = 100%)

Source: WorldACD Market Data; average freight rate including other charges
DHL | Airfreight State of the Industry | Bonn | April 2023 8
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Regional Market Development

Market development on key regional tradelanes

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

intra
ASPA AMNO
EURO
ASPA
EURO AMNO

Forecast
LATAM
EURO
MEA
AMNO

ASPA
AMNO EURO
LATAM

EURO
LATAM
AMNO
Demand > Capacity; Demand, Capacity balanced; Aggressive spot Demand, Capacity imbalance; Backlog- Rates
Rates(++) market fluctuating(+)
Source: DGF Desk Research; most regions have stable capacity but some tradelanes still have tight capacity with likely rate increment
DHL | Airfreight State of the Industry | Bonn | April 2023 9
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Jet Fuel

Jet Fuel Price Development

• Jet fuel price touched
Crude Oil vs. Jet Fuel Price Development Global Jet Fuel Price $/ bbl Global Crude Oil Price $/ bbl $107/Bbl by Mar ’23 end

107
• Economic slowdown
200 indicates lower fuel
consumption which is
79 likely to reduce the prices
• Jet fuel price will remain
150 on the higher side as
demand is increasing
• EIA forecasted the Brent
crude oil spot price to
100 average $85/Bbl in 2023,
up $2/b from last month’s
forecast
• The dependency on crude
50 oil from Russia is shifting
to other OPEC countries
and this shift in market will
keep the crude oil price
0 volatile
Jan- Jan- Jan- Jan- Jan- Jan- Jan- Jan- Jan-
15 16 17 18 19 20 21 22 23

Source: DGF Desk Research; updated till March 2023 available date
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BACKUP

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Global Capacity Development

Capacity Development by Aircraft Configuration January 2019 – April 2023
In tons Passenger Freighter Total Capacity
WHO declared a
1,000,000 global pandemic

+14%

800,000

600,000

400,000 +23%

200,000

0
Feb Apr Jun Aug Oct Dec Feb Apr Jun Aug Oct Dec Feb Apr Jun Aug Oct Dec Feb Apr Jun Aug Oct Dec Feb Apr
19 20 21 22 23

31% 33%
69% 67%

Source: Seabury (Total Capacity includes marginal Combi aircraft contribution); data is updated for same month of release
DHL | Airfreight State of the Industry | Bonn | April 2023 12
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Abbreviations

Explanation of Abbreviations
LY - Last Year
ACTK - Available Cargo Ton Kilometers
mn - Millions
AMLA - Latin America
MoM - Month-on-Month
AMNO - North America
PAX - Passengers (in the airline industry)
ASPA - Asia Pacific
PPE - Personal Protective Equipment
CTK - Cargo Ton Kilometers
Pts - Percentage points
Bbl - Barrel
RPK - Revenue-Passenger-Kilometers
bn - Billions
SSC - Security surcharge
CAGR - Compound Annual Growth Rate
T - Thousands
CLF - Cargo Load Factor
YoY - Year-on-Year
FRT - Freighters (in the airline industry)
YTD - Year-to-Date
FSC - Fuel surcharge
IATA - International Air Transport Association
ICAO - International Civil Aviation Organization

DHL | Airfreight State of the Industry | Bonn | April 2023 13

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THANK YOU

DHL | Airfreight State of the Industry | Bonn | April 2023 14