Clive: Unusual January ‘peak season’ kicks off strong 2021

In early January airfreight volumes, cargo load factors and freight rates began at moderate levels, but by the month’s end air cargo was seeing another unusual spike typical of peak season demand. The trend is not surprising, given current market dynamics and April 2020’s early peak, driven by e-commerce traffic . [caption id="attachment_94404" align="alignright" width="890"] Courtesy of Clive Data Services[/caption] The dynamic load factor for the full month of January, tracked by Clive Data Services, was up 9% year over year. Load factors peaked during the last two weeks of the month and were up by 10%-15% compared to the same weeks in January 2020. The peak is unusual historically, but “not surprising when you look at the current dynamic sin the industry,” Clive Managing Director Niall van de Wouw said in a statement on January’s performance. “The market is very demanding and constantly changing, also because of the regulatory COVID landscape.” According to van de Wouw, the unpredictability of the current market is leading some carriers to tell customs “they cannot guarantee their capacity commitments in January and February,” which is pushing rates higher and keeping operating flights fuller than is typical for this time of year. The strong demand for the little capacity that is currently available in the market also contributed to higher rates during the second half of January. TAC Index, which provides live market data on air cargo rates, the rates on major trade lanes — including Hong Kong to Europe, Hong Kong to the U.S. and Shanghai to North America — were down by between 14%-29% from Jan. 4-18, but had increased by between 12%-19% by early February. The sudden shift between the first and second half of January indicates how rapidly the market environment is fluctuating amid the COVID-19 pandemic, according to Robert Frei, business development director at TAC Index. “If we were not aware of the strong increase in the last week of January, we could possibly assume that, despite the upcoming Chinese New Year, there is a continuing negative trend, but market consensus has it that rate negotiations between shippers, forwarders and carriers are much more short term again (weekly or even per shipment) and, as a result, the number of spot rates has increased drastically compared to previous years,” Frei said in his statement on January performance.

Clive: Unusual January ‘peak season’ kicks off strong 2021

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