Air cargo market remains firm

Global air cargo markets experienced robust growth in the second quarter, with rates on key trades out of Asia remaining firm into the third quarter, despite entering the typically quieter summer season.

The latest IATA data shows that total demand, measured in cargo tonne-kilometres (CTKs), rose by double digits compared to April 2023, marking the fifth consecutive month of such growth. Capacity, measured in available cargo tonne-kilometres (ACTKs), grew by 7.1%, with international capacity up by 10.2% compared to April 2023.

Despite economic uncertainties, air cargo demand remains strong. The Purchasing Managers Index (PMI) for global manufacturing output and new export orders turned positive in April for the first time in two years, suggesting a robust outlook for the remainder of the year and beyond.

The latest air freight data for July indicates volumes are stable due to the quieter summer period, yet still significantly higher than last year.

Key Economic Indicators
– PMIs for global manufacturing output and new export orders were 51.5 and 50.5, respectively.
– Industrial production increased by 1.6% year-on-year.
– Inflation remains stable in major economies: US (3.4%), EU (2.6%), Japan (2.5%), and China (0.2%).

Regional Performance (IATA data)
Asia-Pacific: Demand grew by 14.0% year-on-year.
North America: Demand increased by 7.0% year-on-year.
Europe: Demand rose by 12.7% year-on-year.
Middle East: Demand increased by 9.4% year-on-year.
Latin America: Demand grew by 11.7% year-on-year.
Africa: Demand rose by 10.6% year-on-year.

eCommerce is absorbing excess capacity on scheduled carriers and adding hundreds of dedicated charters weekly, keeping prices firm and rising.

Spot Rate Index
The Baltic Exchange Airfreight Index (BAI) shows that rates from Hong Kong to Europe and North America were up year-on-year and slightly increased compared to May. In June, the average spot rate from Hong Kong to North America rose nearly 17% year-on-year, while rates from Hong Kong to Europe increased by over 22%.

The market remained strong during the low season, driven by robust eCommerce activity and increased belly-hold capacity. Rates from other major Asian markets, particularly India and Vietnam, also saw significant year-on-year increases, especially on lanes to Europe.

High demand and limited capacity suggest a busy peak season from September through Chinese New Year, with continued congestion at global hubs.

For urgent, valuable and sensitive shipments we have a range of airfreight, charter, sea/air and land-bridge solutions, with carrier agreements that protect space and capacity on the busiest routes.

Regardless of your cargo type, size and requirements, we have extremely competitive rate and service combinations, to meet every deadline and budget.

EMAIL Matt Fullard for insights, prices and advice.