Air freight rates begin to drop with May capacity increase

Air cargo market volumes in May dropped 8% year over year as rates declined 10% from April. The air freight market continues to feel pressure from such macroeconomic events as the war in Ukraine, higher cost of living and interest rates, stock market dips and COVID-19-related restrictions in China , according to today’s monthly update from CLIVE Data Services. [caption id="attachment_57065513" align="aligncenter" width="737"] Photo / CLIVE Data Services by Xeneta[/caption] In May the dynamic load factor dropped 9 percentage points as a result of a decrease in demand and increased capacity, with a global load factor of 60% for the past month, CLIVE reported. Compared with 2019, May demand was down 8% and capacity was 12% lower. “We sense an anticipation of a slower summer market, followed by hope for growth in Q3 as is traditionally the case, but the market does not look great right now,” Niall van de Wouw, founder of CLIVE and chief airfreight officer at Xeneta, said in the report. “There are more clouds on the horizon than there were two months ago.” Air freight rates remain 16% higher compared with 2021, and 134% higher than in 2019. But a return in passenger flights and summer schedules have increased overall capacity and reduced prices. Some regions are getting a taste of a “post-COVID future,” according to the report. The market from Europe to North America saw its load factor fall 18 percentage points from March 2022 to May 2022, from 82% to 64%, respectively, as capacity resumed. The dramatic downtick emphasizes “the jump in cub capacity on these routes,” van de Wouw said. Rates also declined between Europe and North America during the last week of May, the first time in two years. Looking forward, ocean market disruptions in the Pacific and labor negotiations at U.S. West Coast ports may impact the airfreight market, according to the report. The Air Cargo Tech Summit, the new airfreight logistics event presented by Air Cargo World , will take place live in Miami from June 6-7. Learn more and register here.

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