Air cargo rates, demand rise further in September as strong peak looms

Worldwide air cargo rates and tonnages edged up further in the final full week of September and the month as a whole, ahead of what is expected to be a strong peak season, according to the latest weekly figures and analysis from WorldACD Market Data.

"After contracting by two percent the previous week as a result of national holidays in China, South Korea and Chile, total global chargeable weight rebounded in week 39 (September 23-29) with a two percent week-on-week (WoW) increase, raising worldwide tonnages in week 39 to around +10 percent above their equivalent levels this time last year," the update added.

The increase included traffic rebounding from Asia Pacific (+ six percent) and from Central & South America (CSA, + four percent) – a recovery effect from the holidays the previous week. "Combined with an increase from Middle East & South Asia (MESA, + two percent), these increases more than compensated for two percent WoW declines from Europe and North America."

On the pricing side, average worldwide rates – based on a full-market average of spot and contract rates – in week 39 edged up slightly (+ one percent, WoW) to $2.61 per kilo, taking them 10 percent higher YoY, based on the more than 450,000 weekly transactions covered by WorldACD’s data.

"The changes to spot rates are more pronounced, for both WoW and YoY comparisons. For example, average global spot rates rose WoW by + four percent in week 39 to $2.86 a kilo, which is 20 percent above last year’s levels. The biggest WoW increase came from North America (+ six percent) and Europe (+ five percent)."

MESA and Bangladesh disruptions continue
While demand and rates from most MESA origins have been highly elevated for much of this year due to the disruptions to ocean freight supply chains caused by the attacks on shipping in the Red Sea, Bangladesh continues to face additional major challenges, resulting from ongoing political instability and logistics disruptions, the update added.

"For example, tonnages flown to Europe from Bangladesh in September were down by around 15 percent YoY, and Bangladesh to Europe spot rates have remained extremely high throughout the month at well above $5 per kilo. Although they eased slightly in week 39 to $5.11 a kilo, they remain more than double last year’s levels (+138 percent). Bangladesh to USA tonnages are up substantially YoY (by around +50 percent in September), and Bangladesh to USA spot rates of more than $7 per kilo throughout September have been more than three times their equivalent levels last year."

Quarterly increases
Analysis of the third quarter (Q3) of 2024 indicates that worldwide chargeable weight rose by a further one percent compared with Q2 and by 11 percent YoY. "That’s broadly in line with YoY comparisons in Q1 and Q2, which were both up, by 12 percent. Average worldwide rates also recorded a QoQ rise of one percent with a YoY increase of 10 percent."

The YoY increases in both tonnages and rates have been largely driven by Asia Pacific and MESA markets, and these two origin regions look set to be key factors in the final quarter of 2024, the update added.