Air cargo rates climb further as global volumes decline in week 15

Global air cargo rates continued to rise in week 15 despite a further drop in worldwide tonnages, reflecting the impact of Easter holidays and the return of additional bellyhold capacity to Gulf markets.

According to WorldACD Market Data, average worldwide spot rates increased by 3% week on week (WoW) to $3.76 per kilo during the week of 6 to 12 April. This puts rates 37% higher than the same period last year and more than 40% above their level at the end of February, when military strikes were launched on Iran.

The strongest WoW increase among major regions was recorded from North America, where spot rates rose 6% to $2.73 per kilo, up 52% year on year (YoY). Rates from Africa increased by 4% to $2.95 per kilo, marking a 62% YoY rise, while Asia Pacific saw a 2% uptick to $4.95 per kilo, up 24% YoY.

From the Middle East and South Asia (MESA) region, spot rates edged down slightly by 1% WoW to $4.81 per kilo, although they remained 66% higher than a year ago. Capacity to and from the region continues to face disruption despite efforts to restore services and identify alternative routings.

On the demand side, global air cargo tonnages declined by a further 6% WoW in week 15, following a 3% drop the previous week. This leaves volumes 8% below the same week last year, based on more than 500,000 weekly transactions tracked by WorldACD. Europe recorded the sharpest decline at 15%, largely due to Easter-related holidays, while Africa fell 7%, Asia Pacific and MESA both declined 3%, and North America slipped 2%.

Global air cargo capacity increased by 1% WoW, led by a 7% recovery in MESA capacity. Although overall capacity has nearly returned to last year’s levels, MESA-origin capacity remains about 20% lower YoY. Across weeks 14 and 15 combined, MESA capacity rose 14% compared with the previous two weeks, but was still 25% below last year. Despite this, tonnages from MESA were slightly higher by 5% YoY, supported by increased use of freighter aircraft, strong demand, and ongoing constraints in ocean freight, alongside the timing of Eid-al-Fitr last year.

Within MESA, capacity from South Asia has recovered to within 5% of pre-war levels. New direct capacity to Europe has largely replaced earlier routings via other regional hubs. Tonnages from MESA to Europe rose 3% YoY in week 15, with India seeing a slight 4% decline, while Bangladesh recorded a sharp increase in volumes.

Average rates from MESA to Europe surged 89% YoY to $4.53 per kilo. This included a 77% increase from India, a 94% rise from Bangladesh, and a 71% gain from Sri Lanka.

The outlook remains uncertain despite a two-week ceasefire agreement between Washington and Teheran earlier this month. While the truce has raised hopes of stability, concerns persist over inflation, high fuel costs, and potential jet fuel shortages. These factors could lead to flight cancellations and further increases in air cargo rates in the coming weeks if the situation does not stabilise.

Bellyhold capacity through the Middle East is expected to take time to fully recover, and container shipping lines do not anticipate a return to pre-conflict flows in the near term, suggesting that air cargo rates may remain elevated.