The air cargo market may be “finding its feet again” – but it may take time.
Latest data suggests Q3 23 saw a 6% rise in shippers committing to airfreight contracts of six months or longer, now at 34% compared with 28% in Q2.
Xeneta says this is a result of “the industry [coming] to terms with a new baseline for the general air cargo market”.
Niall van de Wouw, chief airfreight officer, added: “It is a sign that airlines, freight forwarders and shippers are finding more common ground to enter longer-term agreements. This only happens when people feel more comfortable about the now, and the foreseeable future.
“It is easier to make a commitment now than when the market is on a sharp downward or upward trajectory. There is a firmer floor in place.”
The global general air cargo spot rate also edged up 2% month on month, to $2.23 per kg in September, and continued in the week ending 1 October as the average global air cargo spot rate rose 10% from where it was three weeks ago.
Looking regionally, with cargo rushing out of China ahead of the Golden Week holiday, which began on 1 October, the September China to Europe cargo spot rate rose 11% from the previous month, to $3.19 per kg. Similarly, China to US spot rate rose 9% to $3.63 per kg month on month.
In contrast, the transatlantic market continued to decline. The air cargo spot rate fell to $1.73 per kg in September, down 3% from August.
Rates from South-east Asia to Europe and to the US grew considerably, by 22% month on month, to $2.29 per kg, and up 16%, to $3.14 per kg, respectively. Vietnam to Europe and the US rocketed: up 54% and 32%, to $3 and $3.70 per kg, respectively.
These rates may have appear to have offered hope for a peak season, but Mr van de Wouw said: “This is not a peak season…the general air cargo market is entering a new phase, where parties are not expecting the market to go much higher or much lower”.
And while September air cargo volumes may have been on a par with the same period last year, global air cargo capacity grew at the slowest pace in the past 11 months.
Mr van de Wouw added: “The global air cargo market is still muted, and has been flat at a global level for three months in a row. September produced no surprises, with traditional seasonality pushing up demand over what we saw in August, and we would expect a similar trend in October with less capacity flying around.
“But in my conversations with shippers, forwarders and airlines, I still hear very little hope of demand growth before Q3 24, and for that to happen, we need to see stronger consumer confidence and economic activity.”
DHL Global Forwarding (DHL GF) paints a broadly stable picture for air cargo demand in its November ‘Air Freight State of the Industry‘ report.
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IATA has released data for global air cargo performance in September that shows that the industry enjoyed a continued moderate recovery in the month.
Ultra-large and large forwarders are losing market share in air freight to small and medium-size agents, according to WorldACD Market Data.
Airfreight rates on major east-west trades picked up in October as the industry entered its traditional peak season (see dashboard at end of article).