Monday 20 May 2024

Global air cargo rates hit new high in March, says report

LONDON, April 6, 2024

Global air cargo rates continued to rise throughout March, thanks to strong demand and rising rates from Asia and Middle East origins, taking average prices to within -7% of their elevated levels this time last year and recovering to their levels during last year’s winter peak season, according to latest weekly figures from WorldACD Market Data. 
Average rates rose, week on week (WoW), by around +2% in week 13 (25-31 March) to $2.48 per kilo, following consecutive weekly WoW rises of between +2% and +3% last month, on a globalized basis, progressively narrowing the gap between rates this year and the equivalent periods last year. 
Average rates in January and February were -19% below their equivalent levels in 2023, but throughout March the gap narrowed, from -15% in week 9 to just -7% in week 13, based on the more than 450,000 weekly transactions covered by WorldACD’s data, it stated. 
The narrowing of the rates gap compared with last year partly reflects high comparison rates in January 2023 of $2.92 per kilo, which dropped to $2.70 in February and $2.68 in March 2023, as rates continued to gradually slide from the extreme highs of early 2022. 
But it also reflects a recovery in average rates since the start of the fourth quarter (Q4) of 2023. And despite the usual seasonal drop at the start of this year, and after Lunar New Year, average rates have recovered to close to their peak levels in Q4 last year, the report said. 
Indeed, the current average worldwide rates of $2.48 per kilo are almost exactly equivalent to their average level in Q4 – $2.47 per kilo – which, coincidentally, was also their average level for the whole of 2023. And it is also significantly above pre-Covid levels (+38% compared to March 2019), it added.
Examining what’s behind this consistent recovery in prices in March reveals that it is chiefly driven by increases in rates for air cargo from Asia Pacific and Middle East & South Asia (MESA) origin points, boosted by strong demand from cross-border e-commerce and because of the ongoing disruptions to container shipping in the Red Sea. 
According to WorldACD Market Data, rates from Asia Pacific went up significantly to all regions in March, with average Asia Pacific-Europe rates ($3.78, flat YoY) and Asia Pacific-North America rates ($4.69, +3% YoY) by week 13 reaching or exceeding their levels this time last year. 
Preliminary full-month figures indicate that global air cargo tonnages in March were up, year on year, by around +6%, although the figures for the final few days of March are impacted by the Easter holiday in parts of the world. 
The year-on-year growth for the first three full weeks combined in March was +8% – still a strong performance, although growth has slowed compared to the +13%, YoY, reported for the January-February 2024 period, it added.
Worldwide tonnages in week 13 were down -5% compared with the previous week, dropping in the last four days of the week for many of the carriers reporting to WorldACD’s database, mainly due to Easter. 
Origin Central & South America (CSA) showed a decline in capacity that could further explain part of the ex-CSA tonnage decline, whereas available capacity was stable from the other main origin regions, it added.
Although overall demand for air cargo capacity from MESA origins has softened slightly in the last two weeks from its extraordinarily high levels in February and early March.
Fresh analysis this week by WorldACD illustrates that tonnages from certain key airports in the region – notably important Asia-Europe sea-air hubs such as Dubai and Colombo – remain significantly elevated compared with this time last year, or compared with the period before the disruptions to container shipping in the Red Sea.
Dubai-Europe and Colombo-Europe tonnages were both down by -9% in week 13 compared with the previous week, but they remain up by +94% and +17%, respectively, year on year. Combining weeks 12 and 13, Dubai-Europe and Colombo-Europe tonnages were up, YoY, by 121% and 18%, respectively, it added.-TradeArabia News Service


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