Following a brief lull in May and June, air freight volumes and rates are climbing again, with production backlogs and continuing sea freight disruption combining to create a spike in demand for the time-sensitive mode.
Air cargo demand returned to growth in June following a drop in May. The latest statistics from CLIVE Data Services show that air cargo demand in June increased by 1% compared with the same month in 2019, after declining by 4% in May.
The global air cargo market now seems to be back on track, as COVIDās impact begins to wane, however, growth is equally related to the lack of capacity supply, as it is too strong demand, given the uncertainly that still exists internationally. Basically there is more air freight than in 2019, pre pandemic, but much less available air cargo space available to move it ā predominantly passenger led belly hold capacity that simply is not operating.
Demand from China to the US and Europe is starting to quickly pick up, driven in part by electronic and technology products, with Apple and Sony products creating their own demand spike.
We expect demand – and probably rates – to stay strong till the end of 2021, due to the traditional peak season likely to extend towards the end of the year and beyond, with an early Chinese New Year in 2022, which always creates higher demand for critical shipments.
With most south Asian countries in some form of COVID lockdown, manufacturing delays are expected and carriers are consequently reducing their capacity from these origins and redeploying it to China, reacting to the increased demand from that region, and further reduced passenger requirements as the local country restrictions inhibit the ability for international travel.
The Indian sub-continent (ISC) is facing its own spike in demand, congestion and rates, as exports come back on-stream, following an easing of lockdown restrictions internally in each region.
The ISC largely depended on Middle Eastern carriers, but many have reduced capacity in the region, with Indiaās major airports congested and Bangladesh equally challenging.
Freight from Dhaka Airport is being severely congested and facing rate hikes, as distressed sea freight shifts mode and construction work at the airport leads to massive queues of trucks outside the cargo village waiting to unload.
Some airlines have cancelled or delayed flights as the wait times meant aircraft have had to leave before they had been able to load all their cargo and the expectation is that more airlines will cancel flights.
Production issues, local congestion, ocean freight disruption across the ISC and continuing high demand are leading many importers to realise that their goods will miss deadlines, if they donāt take action. It is the coming together of all these issues that is creating a very early air freight peak, which is anticipated to continue for months, including through the traditional peak period.
Air freight volumes are up in all trade lanes – inbound and outbound – and in some weeks they can be two to three times the levels we would expect for the time of year.
We work closely with leading airlines and cargo carriers to offer the widest range of time-sensitive solutions, routes and transit times at the most competitive rates, from every origin.
We are adding capacity with charter operations in Q3 and Q4 and welcome expressions of interest for specific origins, as we develop plans to deal with the extended āpeak seasonā demand.
If you have urgent or time-sensitive consignments and would like to explore options, transits and costs, please contact Elliot Carlile or Grant Liddell, to ensure your deadlines are met.