Air cargo tonnages build ahead of Lunar New Year: WorldACD

Average worldwide rates of $2.33/kg are 20% below their elevated levels last year

Air cargo tonnages build ahead of Lunar New Year: WorldACD
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Global air cargo tonnages continued to build in the final full week of January, ahead of Lunar New Year (LNY) on February 10, taking volumes for the last two weeks and for January as a whole well above their levels this time last year, according to the latest figures from WorldACD Market Data.

"Preliminary figures for January as a whole show a 14 percent increase compared with January 2023, based on the more than 440,000 weekly transactions covered by WorldACD’s data, although the figures are skewed by LNY falling on January 22 last year with the week following LNY typically seeing a significant drop in tonnages ex-Asia Pacific. Nevertheless, there has been an underlying trend of higher year-on-year tonnages for several months, boosted by strong e-commerce traffic demand, ex-Asia Pacific since the final quarter (Q4) of last year and some limited conversion of sea freight to air and sea-air cargo in recent weeks due to the disruptions to container shipping in the Red Sea."

Weekly analysis
Initial figures for week 4 (January 22-28) indicate that global air cargo tonnages rose by a further five percent compared with the previous week, following a 25 percent WoW rise in week 2 and a further four percent increase in week 3, taking tonnages back up close to their levels in the final weeks of Q4, the update added.

"Average global prices have remained relatively stable throughout January, at an average of $2.33 a kilo, compared with around $2.60 in early to mid-December."

Total combined tonnages for weeks 3 and 4 this year were up by 18 percent globally compared with the preceding two weeks (2Wo2W) with average rates stable and capacity up three percent, the update added.

"Outbound tonnages were up significantly from most of the main global regions, on a 2Wo2W basis, including double-digit percentage increases from Central & South America (40 percent), Europe (28 percent), Asia Pacific (16 percent) and North America (13 percent).

"Most of the main intercontinental lanes recorded double-digit percentage increases in tonnages, on a 2Wo2W basis, including a 55 percent surge from Central & South America to North America, " the update added. "This surge reflects a spike in demand for flowers in North America for Valentine’s Day on February 14."

Year-on-year perspective
Global demand in weeks 3 and 4, combined, is up 19 percent compared with the equivalent period last year with tonnages ex-Asia Pacific up 42 percent and tonnages ex-Middle East & South Asia up 23 percent each.

Overall worldwide air cargo capacity remains significantly up on last year’s levels (16 percent) including a 41 percent rise ex-Asia Pacific.

Average worldwide rates of $2.33 per kilo in week 4 are 20 percent below their elevated levels this time last year although they remain significantly above pre-Covid levels (+31 percent compared to January 2019)Uncertain outlook

Uncertain outlook
Freight and logistics commentators believe the boost to air cargo in recent weeks from sea freight conversions due to the Red Sea disruptions will drop after Lunar New Year, the update added. "However, one major forwarder notes that the knock-on effects and momentum in air cargo will continue even after LNY with one of the main drivers being ocean container equipment shortages at origin ports due to the longer ocean shipping rotations around the Cape of Good Hope."

With an increase in pressure on air cargo capacity, a corresponding increase in air cargo rates can be expected in the coming weeks on some specific trade lanes as already seen in recent weeks.

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