Peak season strain for air cargo

Air cargo shippers are racing to secure space ahead of the peak season, with air freight capacity already under pressure, amid the challenges of potential strikes and high demand.

The latest IATA data shows a 14% year-on-year demand increase in July, marking the eighth consecutive month of double-digit growth. This surge is driven by eCommerce expansion and disruptions like the Red Sea crisis. However, with capacity only increasing by 8%, load factors have jumped to 44%, intensifying the pressure on available space.

The Asia Pacific region saw a notable 18% rise in demand in August, while North American carriers experienced a 9% increase despite interruptions like Hurricane Beryl. The Asia-North America trade lane grew by 11%, and transatlantic routes posted a 7% increase in August, with further growth anticipated as the year progresses.

As the peak shipping season begins in September, air cargo demand is expected to remain strong, particularly in high-demand regions like Asia Pacific. However, capacity constraints are already evident, with many flights fully booked. Additional challenges may arise in the fourth quarter, with reduced belly-hold capacity and potential strikes at US East Coast ports, further exacerbating existing constraints.

Increased vulnerability
The ongoing disruptions in ocean freight due to the Red Sea crisis have led many shippers to shift towards air freight, seeking more reliable alternatives. This increased reliance on air cargo, combined with seasonal reductions in capacity on certain routes, has made the market more vulnerable to further disruptions, including potential backlogs and price spikes.

As carriers focus freighter capacity on the high-demand Asia market, capacity on other routes is being reduced, heightening the risk of market instability. With the peak season looming and current capacity already tight, it’s crucial for shippers to act swiftly to secure space and avoid major disruptions.

Outlook and recommendations
Given the current conditions, it is imperative for shippers to plan ahead and book air freight space as early as possible. High demand, potential capacity shortages, and the looming threat of labour strikes could create an increasingly volatile market in Q4, with rates likely to rise further.

For urgent, high-value, or sensitive shipments, we offer a variety of airfreight, charter, and sea/air solutions. Our block space agreements (BSA) and capacity purchase agreements (CPA) ensure access to space on the busiest routes. Whether your cargo is large or small, we have highly competitive rate and service options to meet your deadlines and budget.

EMAIL Matt Fullard for insights, competitive pricing, and expert advice on navigating the air freight market during this critical time.