THE air cargo market continues to unwind, the global economy slows and consumers tighten their belts as the industry heads into its traditional peak season with a heavy heart, reports London's Trade Finance Global.
Air logistics professionals have lowered expectations for 2023 as consumers spend less on goods, export manufacturing contracts, and cargo shifts back to cheaper ocean services where space is abundant again on many trade lanes.
In the New Year, cargo rates are likely to be volatile economic recession threatens and geopolitical uncertainty persists.
Volumes in October, measured by a formula that combines weight and shipment dimensions, fell eight per cent year on year, following eight months of steady decline, Xeneta reported.
September saw further decline when volumes contracted five per cent and 0.3 per cent versus three years ago.
Performing at last year's record levels, driven by Covid-related shortages and supply chain disruptions, the situation was not sustainable. Then October demand fell three per cent below 2019 levels on a year-on-year basis, culminating in a weak year for air cargo.
Recovery in capacity also stalled. Available belly and freighter space remained seven per cent below pre-Covid levels, according to Xeneta, one of the reasons rates stayed high.
The extra airlift from reintroducing more passenger flights during the summer combined with lower demand means planes are not as full as usual - and therefore not as profitable.
A modest strengthening in Asia-Pacific export lanes to Europe and North America during the second half of October likely had more to do with a rebound from China's Golden Week holiday.
The cost to ship by air from Hong Kong to North America and Europe fell 32 per cent and 13 per cent, respectively year on year.
Overall, global air cargo rates have declined two-thirds since December and about 25 per cent from this time last year. This is in tandem with airline and airport labour shortages that have constrained flight and warehouse productivity.
In contrast, ocean freight rates had not seen such a sharp downturn, where easing in port congestion and falling demand have dropped rates by 70 per cent to 85 per cent year on year.
SeaNews Turkey
Air logistics professionals have lowered expectations for 2023 as consumers spend less on goods, export manufacturing contracts, and cargo shifts back to cheaper ocean services where space is abundant again on many trade lanes.
In the New Year, cargo rates are likely to be volatile economic recession threatens and geopolitical uncertainty persists.
Volumes in October, measured by a formula that combines weight and shipment dimensions, fell eight per cent year on year, following eight months of steady decline, Xeneta reported.
September saw further decline when volumes contracted five per cent and 0.3 per cent versus three years ago.
Performing at last year's record levels, driven by Covid-related shortages and supply chain disruptions, the situation was not sustainable. Then October demand fell three per cent below 2019 levels on a year-on-year basis, culminating in a weak year for air cargo.
Recovery in capacity also stalled. Available belly and freighter space remained seven per cent below pre-Covid levels, according to Xeneta, one of the reasons rates stayed high.
The extra airlift from reintroducing more passenger flights during the summer combined with lower demand means planes are not as full as usual - and therefore not as profitable.
A modest strengthening in Asia-Pacific export lanes to Europe and North America during the second half of October likely had more to do with a rebound from China's Golden Week holiday.
The cost to ship by air from Hong Kong to North America and Europe fell 32 per cent and 13 per cent, respectively year on year.
Overall, global air cargo rates have declined two-thirds since December and about 25 per cent from this time last year. This is in tandem with airline and airport labour shortages that have constrained flight and warehouse productivity.
In contrast, ocean freight rates had not seen such a sharp downturn, where easing in port congestion and falling demand have dropped rates by 70 per cent to 85 per cent year on year.
SeaNews Turkey
