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The global air cargo market high demand growth continued in August with average spot rates at their highest for the year at 24%
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Worldwide average air cargo spot rates of $2.68 per kilogram were boosted by continued demand and supply imbalance
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Last month’s growth grew at its slowest ratio for the year, at 2%, even as demand continued double-digit growth of 11%
The global air cargo market high demand growth continued in August with average spot rates at their highest for the year at 24%. So says the latest analysis by Xeneta.
Worldwide average air cargo spot rates of $2.68 per kilogram were boosted by continued demand and supply imbalance.
Last month’s growth grew at its slowest ratio for the year, at 2%, even as demand continued double-digit growth of 11%. The rise was backed by the ocean-to-air shift due to the Red Sea crisis and e-commerce demand.
Niall van de Wouw, Xeneta’s chief airfreight officer, said: “Typically, air cargo market performance in August tends to follow the July trend. But another month of double-digit demand growth and the strongest rate growths of the year means there was definitely no summer slack season in 2024.”
He added that following the busy summer and on the verge of Q4, it will be interesting to see if all the anticipation of a red-hot peak season materializes.
The air cargo market cruised to its hotly anticipated peak season, boosted by the e-commerce sector.
E-commerce and low value goods from China in the first seven months of 2024 increased by 30% year-on-year, according to Trade and Transport Group, with shipments to Europe and the US up by 38% and 30%, respectively.
The growth momentum of global air cargo volumes slowed down in August, but this was anticipated, partly because demand in the earlier months of the year were weaker compared to the peak volumes in Q4 2023.
Van de Wouw said September should be a “good indicator” of what the last quarter will bring.
“Let’s see if the peak surcharges some carriers plan to implement will hold,” he said.
Based on industry talk, freight forwarders are more prepared this year and are “spending a lot of time with shippers on how to manage the unpredictable nature” of market conditions, added Van de Wouw.
Rising rates throughout the summer is not typical, and it is not clear just how busy Q4 volumes will be.
E-commerce is expected to play a big role and with 30% growth already experienced, indicators suggest strong demand for capacity and this will impact the entire market on major corridors, according to Xeneta.
North America’s air cargo rates registered the biggest increase from last month, during what is normally considered a slack season.
Europe to North America air spot rates rose 7% from the previous month to $1.77/kg in August. This was followed by Southeast Asia and Northeast Asia to North America, with increases of 6% and 4^ to $6.15 and $4.68/kg, respectively.
The last corridor to show growth, Europe to the Middle East and Central Asia, rose 2% from the previous month to $1.58/kg.
Asia and the Middle East to Europe, meanwhile, slipped 1.2% month-on-month.
The largest decrease, however, was the inbound Northeast and Southeast Asia from North America and Europe at negative 4%, due to increased trade imbalance between fronthaul and backhaul trades,
Said Van de Wouw: “We should not be surprised if the market really heats up again in Q4. We expect to see a seller’s market out of Asia and across the Atlantic due to the latter’s reduction in winter capacity.”
“We’ve had a hot summer,” he added, “and we may have an even hotter autumn ahead.”
