Air cargo rates continue to rise from Asia, Middle East: WorldACD

Air cargo rates are rising from most of the main global regions, especially from Asia Pacific and from Middle East & South Asia (MESA), strengthened by the ongoing disruptions to container shipping and elevated demand for cross-border e-commerce shipments.

The average global rate rose by around three percent in week 12 (March 18-24) to $2.45, which is within 10 percent of its elevated level this time last year, according to the latest weekly figures and analysis from WorldACD Market Data. "Although global tonnages in week 12 were slightly down (two percent) compared with the previous week, tonnages for the last two weeks (weeks 11 and 12) combined are up one percent compared with the previous two weeks (a 2Wo2W comparison), and average rates are up by six percent, 2Wo2W, with capacity up by two percent."

The six percent increase in rates, 2Wo2W, was mainly driven by gains of 10 percent from Middle East & South Asia and seven percent from Asia Pacific origin points, the update added.

Middle East & South Asia growth
One of the big ongoing stories at the moment is the continuing surge in demand and rates from MESA origin points, the update added. "With tonnages up 15 percent YoY and capacity up six percent, it’s the only major origin region to also record YoY increases in average rates, which are up by 29 percent in weeks 11 and 12 combined as well as increasing by 10 percent compared with the previous two weeks."

Certain Asia-Europe sea-air hubs such as Dubai, Colombo and Bangkok have experienced exceptionally high air cargo demand to Europe since the start of this year, in large part linked to the disruptions to Asia-Europe container shipping caused by the attacks on vessels in the Red Sea.

"Fresh analysis this week indicates that Dubai-Europe tonnages remain particularly strong, up by 162 percent in weeks 11 and 1 combined compared with their level this time last year. Bangkok-Europe tonnages remain elevated, up by 46 percent YoY, in weeks 11 and 12."

Year-on-year growth
Six weeks on from Lunar New Year (LNY), year-on-year (YoY) comparisons are now more meaningful and reveal some significant improvements in demand levels compared with this time last year, based on the more than 450,000 weekly transactions covered by WorldACD’s data. "Overall global tonnages are up by eight percent, led by a 15 percent rise from Middle East & South Asia and a 12 percent rise from Asia Pacific origin points as disruptions to Asia-Europe container shipping – caused by the attacks on vessels in the Red Sea – and strong e-commerce demand continue to bolster air cargo demand from those regions. There is also YoY growth ex-Africa (1 percent) and ex-Europe (six percent) with North America the only origin region to record a slight decline (one percent)."

Worldwide average air cargo rates are down, YoY, by 10 percent but they remain significantly above pre-Covid levels (36 percent compared to March 2019).

Overall worldwide air cargo capacity continues to be significantly up on last year’s levels (nine percent), most notably ex-Asia Pacific (19 percent) and ex-Central & South America (12 percent), the update added.