Global airfreight volumes didn't subside after China's Lunar New Year holiday in February, as many industry professionals anticipated, and are still going strong, albeit with ebbs and flows. The primary catalysts remain Asian exporters shifting modes because of slower ocean transits around the Red Sea conflict zone and robust bookings by Chinese e-commerce platforms fulfilling orders in Europe and North America.
Air cargo demand grew 11% year over year in April — the fourth month in a row that has happened, according to rate benchmarking platform Xeneta. The International Air Transport Association, widely followed by the broader public, also reported lagging data showing volumes grew 10.3% in March and 13% during the first quarter. Sector volume has increased by double digits for five consecutive months, cementing the recovery trend from a steep downcycle that began in 2022.
And the momentum has carried over into early May with volumes up 12% to 16%, the latest data from WorldACD and Xeneta show.
Demand growth for air transport has tapered slightly in the Indian subcontinent and Southeast Asia as ocean shipping schedules around the Red Sea conflict have become more predictable and cargo owners order goods with longer delivery times in mind, but volumes are still significant by historical standards. A short dip in April related to the Muslim Eid holiday and flooding at Dubai airport was replaced by a surge in flower volumes from Central and South America.
North America is the primary destination market for flowers shipped by air, consuming more than 60% of all flowers flown from Latin America and Africa combined, WorldACD said.
Colombia-based Latam Airlines, for example, said it moved more than 24,000 tons of flowers in the three weeks leading up to the Mother's Day holiday, marking a 20% increase compared to the same period last year. Volumes out of Central and South America are now coming down with the passage of Mother's Day.
The improved business climate is reflected in cargo revenues reported by airlines for the first quarter, with year-over-year declines much narrower than every quarter last year. Air France-KLM's cargo revenues, for example, declined 16.5% compared to 23% in the fourth quarter and saw a 29% drop for the full year against 2022.
A year ago, global airfreight rates were about 45% lower than in 2022. Today, cargo spot rates are about even with the prior year for the first time since August 2022, rising 5% y/y to about $2.50 per kilogram.
The China-North America spot rate reached $5.86/kg on May 12, up about $1.80 from 12 months prior.
At the same time, cargo capacity has increased about 5% y/y as passenger airlines throw more aircraft into action for their big summer schedules, decreasing load efficiency by 3 points to 59%, said Xeneta.
Asia-Pacific air exports remain particularly robust with volumes up 13% in April (but only flat compared to 2019). And after a post-Lunar New Year dip, spot rates on the eastbound corridor from northeast Asia to the U.S. have rebounded by more than 30% y/y, according to Xeneta. Meanwhile, air shipping prices out of the Middle East and southwest Asia are up 42% y/y because ...