Global air cargo demand showed no indicators of slowing down in November as volumes recorded a 13th consecutive month of double-digit increase and load elements hit their top stage since April 2022, primarily based on the most recent market prognosis by Xeneta.
Set aside a query to rose +10% twelve months-on-twelve months in November, fuelled by the ongoing increase in e-commerce. This, coupled with most efficient a marginal +2% increase in air cargo capacity, contributed to world air cargo space rates (valid for one month) also reaching their top stage in practically two years at USD 2.90 per kilo, a sixth consecutive month of double-digit twelve months-on-twelve months increase.
The air cargo market’s exact month-to-month performance in 2024 had resulted in hopes of a ‘top of all peaks’ in Q4 from some sectors of the market. Niall van de Wouw, Xeneta’s Chief Airfreight Officer, nonetheless, says the industry has performed effectively to defend a ways off from it.
“The pause of all peaks need to quiet no longer be a aim. It desires to be refrained from attributable to the imbalance it creates between winners and losers. 2024 had the entire formula to detect loopy top season rates but the truth we haven’t considered this screech manufacture is one other signal of the maturity we beforehand referenced in the arena air cargo market. What we witnessed in 2023 turned into a huge amount and a priceless lesson. In 2024, we’re seeing these classes build into observe,” he acknowledged.
“Folks need to quiet no longer be upset. We’re witnessing an extraordinary more grown-up air cargo market primarily based on greater allocation of resources and better phrases and conditions between all parties tantalizing. The pause in 2023, in comparability, saw a shortage of capacity and rates going loopy, all at the expense of shippers,” van de Wouw added. “Why would we desire to perambulate encourage there every other time? The provision chain stress of a top of all peaks would get damage patrons and build pointless restraints on relationships. It could presumably well presumably get been opportunistic for non eternal good points.”
Van de Wouw acknowledged the closing months of the twelve months get considered the air freight industry “take wait on watch over of its believe destiny.”
Whereas some observers get indicated a muted cease-of-twelve months air cargo market, van de Wouw called for perspective.
He acknowledged: “That is an air cargo industry that’s for the time being firing on all cylinders, but which is no longer out of wait on watch over. November’s files shows a market the do volumes were +10% greater than an especially busy corresponding top month final twelve months, and rates get risen, too.
“The closing months of 2024 could presumably well even get been very messy every other time for shippers, but we’re no longer hearing that. That’s no longer for the reason that volumes are no longer there, or the flights are no longer beefy. It is because the entire lot, total, is being managed greater. The industry need to quiet take hundreds of credit ranking for that.”
Global air cargo space rates stay above seasonal rates
This power present-demand imbalance of 2024 pushed the dynamic load ingredient in November to 63% – its top stage in over 30 months. Dynamic load ingredient is Xeneta’s size of capacity utilisation primarily based on quantity and weight of cargo flown alongside in the market capacity.
This stage of demand has strengthened the negotiating space of carriers and considered world air cargo space rates stay above seasonal rates (valid for over one month) since gradual November 2023.
Via month-on-month developments, this twelve months’s top season, nonetheless, has been less intense than final twelve months’s. Because of carriers’ proactive capacity management, the arena air cargo space rate increased most efficient +12% between early September (the initiate of top season) and the week ending 1 December, when compared to a +25% surge for the duration of the identical period final twelve months
This building is especially evident in the outbound Asia market. As carriers get shifted capacity to accommodate surging cargo demand, November space rates from Northeast Asia skilled common increase. Its space rates to Europe rose by +13% month-on-month to USD 5.09 per kg, whereas space rates to North The US increased +5% to USD 5.20 per kg.
Additionally, space rates from Southeast Asia showed mixed outcomes, with space rates to Europe remaining flat at USD 4.15 per kg and North The US declining -3% to USD 6.05 per kg. The decline in the latter turned into driven by easing volumes, following space rates exceeding final twelve months’s top season ranges since gradual Would possibly 2024.
Within the intervening time, the Transatlantic market skilled more dramatic freight rate increases as cargo capacity moved in diverse locations at the cease of the summer season passenger shuttle season. Europe to North The US space rates climbed by +46% from the previous month to USD 2.72 per kg, which is in distinction to the blooming +9% month-on-month increase for the duration of the identical period a twelve months in the past.
Equally, Europe to Latin The US rates rose by +23% to USD 4.58 per kg. In Brazil, a five-day embargo in early November in Sao Paulo, South The US’s largest cargo airport, coupled with ongoing nationwide digital customs delays introduced on by Brazilian Customs’ strike since 26 November, can also push air cargo space rates even greater in December. Shippers are seemingly to resort to air freight to defend a ways off from customs clearance delays.
“In my conception, I believe the air cargo industry desires to be proud it has refrained from a ‘top of all peaks’ because here’s the root for greater market stability. I am hoping this can also enable everyone to perambulate into their effectively-earned Christmas and Original Year holidays with a sense of pleasure, and it permits them to relax out and expertise time with their families and friends,” van de Wouw acknowledged.
“In 2024, the industry has proven its maturity. We need to wait and detect if this holds when the market goes down, but I don’t detect that occuring blooming yet.”
