Air freight spot rates have risen steadily since August on major Asia outbound lanes and while there is no significant peak season the market is definitely tighter, with global rates and tonnages stabilising after China’s Golden Week.
There is a perceptible uptick in air cargo rates, which is more pronounced than normal and while it may not suggest a major shift in the market, there is definite tightening from week-to-week and from lane-to-lane, particularly from Asia.
Market data for October shows a 2% increase in air cargo demand, which followed earlier increases that reversed the traditional drop triggered by China’s Golden Week holiday. The increase comes as cargo capacity growth slows, with global belly capacity returning to its pre-pandemic level.
Global air cargo spot market rates rose 2.9% in October and while rates were down 30%, on the year, they remain well above pre-Covid 2019 levels, supported by premium and special cargoes.
China to Europe spot rates climbed 14% month-over-month in October, while Southeast Asia to Europe spot rates rose 9% and spot rates from Europe to the US were up 7%. The traditional decline in cargo capacity began last week, as seasonal passenger schedule adjustments remove belly-hold capacity from key trade-lanes.
Air cargo space from Asia to North America is under pressure as strong eCommerce demand outstrips the slow return of passenger flights and the essential belly cargo capacity they add. With spot rates from China to the US rising 10% in October and 15% from Southeast Asia.
Dynamic global load factors reached 59% in October, which is its second-highest level of the year, while Trans-Pacific load factors reached 89%. This is close to levels seen at the peak of the pandemic and means that any sudden increase in demand will see space squeezed very quickly.
The major eCommerce companies in China are buying up space, with November online shopping promotions looming and much of any available air cargo space will go towards moving sales from Singles Day, Black Friday and Cyber Monday.
While there may be no clear sign of any significant fourth-quarter peak season, there is a definite tightening in the market, which means it is critical that pending air freight shipments are scheduled at the earliest opportunity, to secure space and the best available rate.
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