According to the latest data, volumes are flowing back into air freight and prices are rising while the industry waits to see what is in store for the ‘peak’ period.
September saw a record dynamic load factor, of 70%, up two percentage points (pp) from August and 8pp higher than a year earlier.
Load factors rose to 71% in the week of 28 September, according to the latest analysis from Clive Data Services. Chargeable weight in September was up 9% month-on-month, while global air cargo capacity was 25% lower than the same month in 2019.
That capacity constraint continues to trigger pricing increases, according to TAC Index.
“It is interesting to see how closely demand/volume and pricing correlate in light of the fact there are a lot fewer BSAs (block space agreements) in place, currently,” said Robert Frei, business development director.
“There were steady increases in pricing, week over week, in September, with rates on lanes from China/Hong Kong to the EU in the last week of September 8% higher than in the last week of August.”
China’s Golden Week holiday likely accounted for a slight reduction in weekly volumes on China-Europe last week, they were down 3%, while previously there has been mostly positive growth.
The transatlantic, which was dominated by belly capacity pre-Covid, saw load factors rise to 84% on westbound routes, 18 pp higher than last year, while eastbound load factors were 68%, up 20 pp year on year. Rates on the routes rose 170% westbound and 73% eastbound, year on year.
The rises mark the fifth consecutive month of growth for “resilient” air cargo, said Niall van de Wouw, MD of Clive Data Services, adding that ‘boring is good”. But he warned of potential difficulties for customers.
“It means shippers and forwarders are being faced with higher airfreight costs. Uncertainty over how the market will develop alongside very high load factors is a toxic combination for the buyers of airfreight capacity.
“If this demand persists, and shippers are prepared to pay, we may well see a resurgence in passenger planes being deployed mainly, or solely, for moving freight. These remain uncertain times, but with more optimism in the market for October and November volumes, the question is: how far can the recovery go?”