TENSION is mounting in the global air cargo market with rates at their lowest since March 2020 as airlines and forwarders search for volumes, reports CLIVE Data Services, part of Xeneta, reports the American Journal of Transportation.
The global air freight spot rate fell 40 per cent in May from a year earlier, reaching its lowest level in over three years of US$2.41 per kg, just days after IATA predicted airline cargo revenues and yields could fall by more than 31 per cent and 29 per cent respectively in 2023.
Softening global air cargo demand saw a less severe year-on-year drop of one per cent in chargeable weight in May, the smallest monthly decline in the past 12 months, but the influx of belly capacity for the peak summer leisure travel market applied more downward pressure on rates. Global air cargo capacity in May continued its double-digit increase, up 14 per cent year on year.
Less demand and more capacity led to an inevitable fall in dynamic loadfactor, CLIVE's measurement of global volume and weight perspectives of cargo flown and capacity available. It was five per cent pts lower vs May 2022 at 55 per cent.
Said Xeneta air freight chief Niall van de Wouw: 'There are a lot of ambitious forwarders in the market that want to grow - but they cannot grow with their current customer bases because the air freight demand is not there.'
The year-on-year decline of freight rates on most of the major fronthaul lanes in May outpaced the industry average. In line with deteriorating PMI readings, the outbound Southeast Asia market experienced the largest year-on-year rate fall among top headhaul corridors.
Its spot air cargo rates to the US and Europe fell 68 per cent and 62 per cent respectively over the month. Northeast Asia (excluding mainland China) to the US saw cargo rates slump 60 per cent from a year ago. The only exception is the China to the US corridor. It recorded only a 31 per cent decline from a year earlier, which is below the industry average of -40 per cent. Furthermore, this is the only corridor among these major lanes to experience a price surge from a month ago.
SeaNews Turkey
The global air freight spot rate fell 40 per cent in May from a year earlier, reaching its lowest level in over three years of US$2.41 per kg, just days after IATA predicted airline cargo revenues and yields could fall by more than 31 per cent and 29 per cent respectively in 2023.
Softening global air cargo demand saw a less severe year-on-year drop of one per cent in chargeable weight in May, the smallest monthly decline in the past 12 months, but the influx of belly capacity for the peak summer leisure travel market applied more downward pressure on rates. Global air cargo capacity in May continued its double-digit increase, up 14 per cent year on year.
Less demand and more capacity led to an inevitable fall in dynamic loadfactor, CLIVE's measurement of global volume and weight perspectives of cargo flown and capacity available. It was five per cent pts lower vs May 2022 at 55 per cent.
Said Xeneta air freight chief Niall van de Wouw: 'There are a lot of ambitious forwarders in the market that want to grow - but they cannot grow with their current customer bases because the air freight demand is not there.'
The year-on-year decline of freight rates on most of the major fronthaul lanes in May outpaced the industry average. In line with deteriorating PMI readings, the outbound Southeast Asia market experienced the largest year-on-year rate fall among top headhaul corridors.
Its spot air cargo rates to the US and Europe fell 68 per cent and 62 per cent respectively over the month. Northeast Asia (excluding mainland China) to the US saw cargo rates slump 60 per cent from a year ago. The only exception is the China to the US corridor. It recorded only a 31 per cent decline from a year earlier, which is below the industry average of -40 per cent. Furthermore, this is the only corridor among these major lanes to experience a price surge from a month ago.
SeaNews Turkey