WorldACD: Air cargo tonnages rebound ahead of Chinese holiday period

Worldwide air cargo tonnages have rebounded in mid-September following their usual annual dip caused by Labor Day in the US and Canada on 7 September, with chargeable weight rising for the fourth consecutive week, and tonnages, rates, and capacity all up compared with this time last year, from all major regions. According to the latest weekly figures from WorldACD Market Data, global tonnages rose, week on week (WoW), by +2% in week 38 (14 to 20 September), mainly driven by a +14% rebound in volumes from North America origins, taking North America traffic back up to its level in the previous few weeks. But there were declines from Middle East & South Asia (MESA) of -4%, WoW, and from Africa also recording a -4% WoW decline. Compared with the equivalent period last year, worldwide tonnages were up +8% in week 38, driven by a +11% year-on-year (YoY) increase from Asia Pacific origins, and to a lesser extent, a +8% increase from North America, +6% year-on-year growth from Europe, and +2% increases from MESA and Central & South America (CSA). Stable rates remain well above last year’s levels On the pricing side, average worldwide rates in week 38 were broadly stable, based on a full-market mix of spot rates and contract rates, with the biggest percentage change coming from the Africa market, where rates rose by +6%, WoW, to an average of US$2.47 per kilo. Average worldwide full-market rates are +24% higher, YoY, with the biggest rises coming from the MESA region of +49%, YoY, followed by +26% increases from Europe and Africa and +21% higher rates from Asia Pacific origins. Average worldwide spot rates were also flat in week 38 compared with the previous week, at $3.45 per kilo, despite jet fuel prices increasing again. Africa recorded the biggest WoW rise in spot rates, with a +7% increase, while spot rates from Asia Pacific and Europe each edged up +1%, offset by drops from North America (-4%) MESA (-2%), and CSA (-1%, WoW). That worldwide average of $3.45 per kilo is +33% higher, year on year, with all the world’s regions recording YoY rate increases, mostly of at least +25% – with CSA the one exception, where spot rates are up just +5%, YoY. But there were big YoY increases from MESA of +52%, followed by rises of at least +30% from North America (+34%), Africa (+31%), and Asia Pacific (+30%), followed by a +29% increase from Europe origins. Looking more closely at the drop in tonnages from MESA indicates that traffic from the region to the US recorded a -5% week-on-week decrease, including a -5% drop from India, a -17% drop from Bangladesh, and a -10% decline from Sri Lanka, while tonnages from some Gulf markets also remain volatile. Traffic from MESA to Europe was more stable, rising slightly (+1%) week on week, with increases from Bangladesh offsetting a significant week-on-week decline from Sri Lanka (-14%). Worldwide capacity broadly stable, but remains down significantly ex-Gulf On the capacity side, worldwide capacity was broadly stable in week 38, rising around +1%, week on week, thanks to freighter capacity increasing by almost +2% and passenger capacity declining slightly. Compared with last year, total international capacity continues to grow, up +4% YoY, led by freighter growth of +5%, YoY. Compared with the level in week 7, just before the start of the US-Iran conflict, worldwide capacity in week 38 is up by an average of +4%, including significant increases to and from Europe of +19%, whereas capacity to and from MESA is down by an average of -9%, and capacity to and from Asia Pacific is around -2% lower. Within that -9% drop in capacity to and from MESA, capacity to and from South Asia is around +3% higher, whereas to and from the Gulf Area, capacity remains down by almost -17% since its level at the start of the Iran conflict. Capacity from the Gulf dropped by around -1% in week 38 compared with the previous week. Asia Pacific growth continues, except to Europe Following a slight, gradual recovery of traffic from China and Hong Kong to Europe in the previous four weeks, after two months of steep declines since the removal of EU ‘de minimis’ exemptions on 1 July, volumes from Hong Kong and mainland China slipped backwards somewhat in week 38, including a -5% drop, week on week, from Hong Kong. Compared with this time last year, air cargo tonnages from Hong Kong to Europe are down -29%, with mainland China volumes broadly stable, with a +2% year-on-year increase. Nevertheless, spot rates from China and Hong Kong – and from the Asia Pacific origins as a whole – to Europe remain firm, with further small WoW increases in week 38 from key markets including mainland China (+4%), Hong Kong (+1%), Japan (+3%), and South Korea (+2%). And from Vietnam, spot rates rose +8%, WoW, for the second consecutive week, to $4.89 per kilo. Average spot rates to Europe from Asia Pacific origins as a whole rose by +2%, WoW, to $4.72 per kilo in week 38. Meanwhile, demand from Asia Pacific origins to the US remains strong, up +13%, YoY, thanks to big YoY increases from South Korea (+54%, YoY), Japan (+47%), China (+14%), and various key Southeast Asian origins including Thailand (+12%), Singapore (+10%), and Indonesia (+19%). Average spot rates from Asia Pacific to the US in week 38 were broadly stable, at $6.75 per kilo, but they were around +40% higher than the equivalent week last year, including year-on-year increases from Singapore of +62%, and +50% higher spot rates from Japan, YoY. China’s Golden Week and Mid-Autumn Festival add pressure China’s Mid-Autumn Festival (25 to 27 September) and National Day Golden Week (1 to 7 October) holiday periods are coming up in close succession, compressing production, export handovers, and freight planning into a very narrow window before October, freight forwarders highlight. Air freight often becomes a pressure-release option when ocean freight schedules are missed, causing urgent shipments, high-value goods, and e-commerce traffic to compete for limited uplift before and immediately after Golden Week. Forwarders report that general cargo demand from North China is rising as shippers push cargo out ahead of the holiday period, although e-commerce volumes remain relatively soft. New charter capacity entering the market is said to be broadly absorbing any rate pressure that stronger general cargo volumes would otherwise create, causing rates to hold relatively steady. From Southern China, transpacific demand is rising, but sufficient capacity availability is keeping rates relatively stable, and e-commerce demand also from this region remains relatively low. Nevertheless, the upcoming holidays in China may lift the temperature of transpacific markets in the coming few days, although Asia Pacific westbound demand to Europe currently remains soft, keeping rates relatively subdued on that lane. For Editorial Inquiries Contact: Editor Matt Driskill at [email protected] For Advertising Inquiries Contact: Head of Sales Sally Passey at [email protected]