Air cargo’s strong start to 2024 continues in February

February followed January’s lead with double-digit growth in air cargo volumes and an increase in freight spot rates, despite February traditionally being a slower time of year for airfreight volumes. February saw volumes increase 11% year-over-year, ocean and airfreight rate analytics platform Xeneta said in a release this week. January saw a 10% YoY growth. The average spot rate in February rose 2% from the previous month to $2.29 per kilogram. “It’s a surprising start to the year from a volume perspective, and not something people would have expected, ourselves included, with demand much higher than it was a year ago,” Xeneta Chief Airfreight Officer Niall van de Wouw said in the release. “Generally, we wouldn’t expect to see a rate uptick at this time of year.” The growth in air cargo traffic in February, measured in chargeable weight, rose 10% month-over-month, pushing the global dynamic load factor up by 4 percentage points to 60%, while global air cargo capacity remained relatively unchanged from the previous month, according to Xeneta. [caption id="attachment_57141812" align="alignnone" width="1024"] (Courtesy/Xeneta)[/caption] Red Sea situation Van de Wouw partially attributes the increase in airfreight demand to the situation in the Red Sea , where Houthi rebels continue to fire upon ships. Ocean schedule reliability for Asia-to-Europe trade lanes was recorded at 39.4% in January, its lowest level since October 2022, according to research firm Sea-Intelligence . “This has further contributed to the strong increase in air cargo demand on this corridor for shippers willing and able to bear the higher cost of airfreight to maintain the resilience of their supply chains,” the Xeneta release stated. The South Asia-to-Europe market led MoM spot rate growth in February with an increase of 18%, which Xeneta also attributes to the Red Sea situation. The average spot rate from South Asia to Europe increased 34% MoM to $2.15 per kilogram. E-commerce boom Spot rates and volume increases in February were likely also driven by e-commerce demand from China, according to Xeneta. “Some operators even imposed short-term embargoes on import traffic ex-Asia during February to help clear backlogs caused by the sudden surge in air cargo volumes as demand growth outpaced the growth of global cargo supply, [up] 5% YoY, for the fourth consecutive month,” the release stated. As a result, February’s YoY decline in the global air cargo spot rate reached its lowest level since October 2022, at 14%. “Signals suggest inflation is not cooling because consumers are still spending,” van de Wouw said. “It’s not how much they are spending that’s boosting airfreight, it’s where they are spending. Trends indicate more consumers are buying on e-commerce platforms, and the intercontinental nature of these businesses, as well as the speed with which they are expected to deliver, is benefiting air cargo. For some airlines, e-commerce now makes up over 50% of their revenue ex-East Asia.” Driven by strong demand for apparel products, spot rates in the week ending March 3 surged in the following markets: India, up 81% MoM; Sri Lanka, up 55% MoM; and Bangladesh, up 40% MoM. [caption id="attachment_57141811" align="alignnone" width="1024"] (Courtesy/Xeneta)[/caption] Shifting strategies To avoid airfreight capacity constraints caused by rising cross-border e-commerce, particularly from China’s Guangzhou and Hong Kong, some shippers are beginning to shift operations from hubs now dominated by e-commerce, according to Xeneta. The summer travel season will soon begin, with airlines preparing to launch their summer schedules this month. Increased passenger travel means increased belly capacity. “We now wait to see what impact the airline’s summer schedules will have as well as what happens next in the Red Sea,” van de Wouw said. “We would certainly expect to see a downward pressure again on rates once the summer belly capacity returns in the western hemisphere, as well as China, where the travel recovery is by no means yet done.” Register here for Air Cargo Next ’s free webinar, “The Role of Drones in the Future of Air Cargo,” on Tuesday, March 26, at 11 a.m. ET.

Air cargo’s strong start to 2024 continues in February

Average spot rate rose 2% from January

Qantas to retire Boeing freighters in 2024

Airfreight demand climbs amid Red Sea crisis

Related Posts

August cargo traffic finishes summer with global growth

Airlink founder named CEO of Airforwarders Association

Retaliatory tariffs hit US imports into Canada

Airfreight demand climbs amid Red Sea crisis

Cargo Facts Free Newsletters

Cargo Facts Connect Podcast

Follow Us

Welcome Back!

Retrieve your password