Global air capacity surpasses pre-pandemic levels

Global air cargo capacity rose above pre-pandemic levels in February for the first time in four years. Capacity increased 11% year over year in February , according to data from CLIVE by Xeneta . Global capacity has increased for 11 consecutive months. Global air cargo volumes, however, fell 4% YoY in February. The global average air freight spot rate declined 35% YoY to $2.73 per kg but was 52% higher than the pre-pandemic level in 2019. Global average dynamic load factor — which measures cargo load factor by volume and weight of cargo flown and capacity available — stood at 57% in February, down 8% YoY. Niall van de Wouw, chief airfreight officer at Xeneta, said the industry needs to acknowledge a new baseline for air cargo market growth. “The air cargo industry should be focused on where growth is going to come from because the general air cargo volumes have seen negative growth for four years, and based on the first two months of 2023 are still -8% in terms of chargeable weight compared to four years ago,” he said. “That is not a growth market. “The volumes are not there, flights are less full, and more capacity will be coming in April as summer flight schedules commence, so I don’t see fundamental changes that will help the current market conditions,” van de Wouw added. He noted that he has not heard any shippers saying they will ship more airfreight. Instead, they will be looking to use cheaper transport first. German strikes hurt capacity The strikes in German airports on Feb. 17 had a “profound impact on air cargo capacity , ” according to the CLIVE report. Outbound cargo capacity at Frankfurt fell 60% that week compared to the week prior. Some trade lanes saw lower flower cargo volumes prior to Valentine’s Day due to rising transportation, fertilizer and labor costs as well as the cost-of-living crisis. Lanes from Kenya and Ethiopia to Amsterdam saw volumes below the levels of three of the past four years. However, volumes from Colombia and Ecuador to Miami outperformed the last four years. Spot rates down from January On Asia-Pacific (APAC) to Europe routes, the average February spot rate was $3.84 per kg, down 9% from January and 48% YoY. The rate also was 74% above the pre-pandemic level. From Southeast Asia to Europe, the February spot rate fell 63% from last year to $2.68 per kg, only 38% above the pre-pandemic level. Capacity shortage and increased operating costs caused spot rates from China to remain elevated at $3.93 per kg, 80% higher than pre-pandemic levels. Those factors also impacted spot rates in northeast Asia, which includes Hong Kong, Japan and South Korea. The northeast Asia rate was $4.75 per kg, 93% above pre-pandemic levels. The spot air freight rate from APAC to North America was $4.42 per kg in February, down 6% from January and down 60% from 2022. The spot rate was 47% above the pre-pandemic level. Spot rates from northeast Asia (excluding China) and southeast Asia were $4.34 per kg and $3.70 per kg respectively. Those rates were 42% and 18% above pre-pandemic levels. However, the rate from China remained high at $5.22 per kg, 73% above pre-pandemic levels. The average spot rate was $2.28 per kg from Europe to North America, down 6% from January and down 40% from 2021, but still 42% above the pre-pandemic level. “The stabilizing market is creating a new baseline,” van de Wouw said at the end of the report. “It’s time to let go of pre-Covid comparisons, and we will now reflect this in our own weekly data analysis from March 2023.”

Global air capacity surpasses pre-pandemic levels

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