Air cargo volumes up 6% in Sept, says Xeneta

Drop in air cargo capacity and month-over-month seasonality pushed volumes up six percent in September, according to the latest data from CLIVE Data Services, a part of Xeneta.

"The number of shippers committing to airfreight contracts of six months and above in Q32023 rose to 34 percent from 28 percent in the previous three months as the industry comes to terms with a new baseline for the general air cargo market," says the update.

Niall van de Wouw, Chief Airfreight Officer, Xeneta says: “This is not a peak season. It is a sign that airlines, freight forwarders and shippers are finding more common ground to enter longer-term agreements. We previously referenced no macro and market currents to support an expectation of a peak season, and this is still the case. We also said if there was to be an uptick in rates, we would expect this to be mainly driven by the supply side than the demand side, and this also still holds true.

"The general air cargo market is entering a new phase where parties are not expecting the market to go much higher or much lower. It is finding its feet again. We see more longer-term contracts being signed and this only happens when people feel more comfortable about the now and the foreseeable future. It is easier to make a commitment now than when the market is on a sharp downward or upward trajectory. There is a firmer floor in place."

The global general air cargo spot rate edged up two percent month-over-month to $2.23 per kg in September with the growth accelerating towards the end of the month. The upward trend continued in the week ending October 1, 2023 as the average global air cargo spot rate rose 10 percent from three weeks ago.

"September air cargo volumes were on par with the same period last year but capacity grew at its slowest pace in the past 11 months. It ticked up five percent from a year ago but adjusted down slightly compared to a month ago as passenger belly capacity began to be gradually eased out of the market as summer travels in the Northern hemisphere cooled down."

As capacity demand and supply continued to rebalance, the global dynamic load factor, which measures cargo load factor based on both volume and weight perspectives of cargo flown and capacity available, increased to 58 percent in September, up two percentage points from a month ago. The load factor, however, was below last year’s level by two percentage points, the update added.

Regional story
With cargo rushing out of China ahead of the Golden Week holidays from October 1, the China to Europe cargo spot rate increased 11 percent from a month ago to $ 3.19 per kg in September. Similarly, the China-U.S. spot rate rose nine percent to $3.63 per kg month-over-month.

"Southeast Asia to Europe and U.S. spot rates zoomed 22 percent month-over-month to $2.29 per kg and 16 percent to $3.14 per kg, respectively. The transatlantic market continued to decline - spot rate fell to $1.73 per kg in September, down three percent from a month ago."

van de Wouw adds: “The global air cargo market is still muted and has been flat at a global level now for three months in a row. September produced no surprises with traditional seasonality pushing up demand over what we saw in August. We would expect a similar trend in October with less capacity flying around. In my conversations with shippers, forwarders and airlines, I still hear very little hope of demand growth before Q32024, and for that to happen we still need to see stronger consumer confidence and economic activity."