Business Bayani PH

Global air cargo is on the rise this January, showing a significant boost compared to last year, according to data from WorldACD Market Data. Tonnages from major regions worldwide are up, except for traffic from North America.

Freight forwarders note a shift in cargo movement, with some cargo owners switching from sea to air or sea-air for Asia-Europe routes. This change is driven by longer ocean voyages due to disruptions in the Red Sea and the later Lunar New Year (LNY) in 2024, scheduled for February 10, compared to January 22 last year.

Despite challenges in pinpointing this trend in data due to seasonal factors, WorldACD’s figures underline a strong surge in global air cargo demand. Meanwhile, ocean freight rates from Asia to Europe have tripled post-Red Sea disruptions, contrasting with stable air cargo rates worldwide.

Ahead of Lunar New Year, some forwarders are blocking additional air capacity on key routes, anticipating a shift from ocean to air freight. With the window for air freight bookings narrowing, the next two to three weeks could be challenging, as container ships are expected to arrive in bulk at major European ports.

In week 3 (January 15 to 21), global air cargo tonnages increased by 5% week-on-week, following a remarkable 25% rise in week 2. This brings tonnages close to December levels and around 90% of the peak observed in October and November. Average global prices have rebounded slightly by 2%.

Specific analysis by WorldACD reveals notable week-on-week increases in tonnages to Europe ex-China (+4%) and ex-Hong Kong (+9%). Tonnages ex-Gulf Area to Europe were down -17% week-on-week, while rates increased by +17%. However, both were still below December’s levels.

Looking at two-week figures (weeks 2 and 3), global tonnages increased by +26%, thanks to a post-New Year tonnage bounce-back in week 2. Average rates, however, saw a slight dip of -2%, with capacity increasing by 3%.

Examining outbound tonnages on a two-week basis, significant increases were observed from major global regions, including +44% ex-Europe, +29% ex-Central & South America, and +27% ex-North America. Notably, traffic ex-Asia Pacific rebounded strongly with a +22% increase. Despite this surge, average rates remained stable, with only ex-Asia Pacific rates (-4%) deviating significantly.

From a year-on-year perspective, global demand in weeks 2 and 3 combined showed a robust +6% increase compared to the same period last year. This is noteworthy considering the early Lunar New Year and the surge in air cargo traffic preceding factory closures in China during the equivalent period last year.

On the pricing front, average worldwide rates of $2.35 per kilo in week 3 marked a -22% decrease from the elevated levels last year. Despite this decline, rates remain significantly above pre-COVID levels (+32% compared to January 2019).

In summary, overall worldwide air cargo capacity continues to surge, with a substantial +12% increase compared to last year’s levels. Noteworthy double-digit percentage rises in capacity were observed ex-Asia Pacific (+29%), ex-Middle East & South Asia (+12%), and ex-Central & South America (+12%). The robust demand and capacity trends in the air cargo industry indicate resilience and adaptability amid ongoing disruptions.◼