Global air cargo rates continued to rise in March due to high demand and increased prices from Asia and Middle East origins. As a result, average prices nearly reached the elevated levels seen this time last year, recovering to their levels during last year's winter peak season.
WorldACD Market Data's latest weekly figures and analysis show that the average prices were within -7% of last year's levels.
Average rates rose, week on week (WoW), by around 2% in week 13 (March 25-31) to US$2.48 per kilo, following consecutive weekly WoW rises of between 2% and 3% last month, on a globalized basis, progressively narrowing the gap between rates this year and the equivalent periods last year.
[Source: WorldACD]
Average rates in January and February were -19% below their equivalent levels in 2023, but throughout March, the gap narrowed, from -15% in week 9 to just -7% in week 13.
Rates recover to Q4 peak levels
The air cargo market data provider said the narrowing of the rates gap compared with last year partly reflects high comparison rates in January 2023 of US$2.92 per kilo, which dropped to US$2.70 in February and US$2.68 in March 2023, as rates continued to gradually slide from the extreme highs of early 2022.
But it also reflects a recovery in average rates since the start of the fourth quarter (Q4) of 2023.
"And despite the usual seasonal drop at the start of this year, and after Lunar New Year, average rates have recovered to close to their peak levels in Q4 last year," WorldACD said.
It added that the current average worldwide rates of US$2.48 per kilo are "almost exactly equivalent" to their average level in Q4 —US$2.47 per kilo—which, coincidentally, was also their average level for the whole of 2023.
The report noted that it is also significantly above pre-Covid levels (+38% compared to March 2019).
[Source: WorldACD]
WorldACD said the consistent recovery in prices in March is mainly driven by increases in rates for air cargo from Asia Pacific and Middle East & South Asia (MESA) origin points, boosted by strong demand from cross-border e-commerce and because of the ongoing disruptions to container shipping in the Red Sea.
Rates from Asia Pacific went up significantly to all regions in March, with average Asia Pacific-Europe rates (US$3.78, flat YoY) and Asia Pacific-North America rates (US$4.69, +3% YoY) by week 13 reaching or exceeding their levels this time last year.
For MESA, WorldACD noted that the main driver was MESA to Europe destinations.
It added that MESA to Europe rates averaged around US$2.40 in week 9, already up 28% compared with the same week last year. But by week 13, they had risen to US$3.00 per kilo, up 62% year over year (YoY).
"Preliminary full-month figures indicate that global air cargo tonnages in March were up, year on year, by around 6%, although the figures for the final few days of March are impacted by the Easter holiday in parts of the world," the report said.
It added that the year-on-year growth for the first three full weeks combined in March was 8% —still a strong performance, albeit growth has "slowed" compared to the 13% YoY increase reported for the January-February 2024 period.
Worldwide tonnages in week 13 were down -5% compared with the previous week, dropping in the last four days of the week for many of the carriers reporting to WorldACD's database, mainly due to Easter.
Nevertheless, tonnages from most of those origin regions were still up significantly compared with the equivalent two weeks last year, with Africa up 15%, Asia Pacific up 10%, MESA up 7%, and Europe 3% ahead, YoY, and only North America (-3%) recording a YoY decline in demand.
Ex-MESA surge slows
WorldACD said although overall demand for air cargo capacity from MESA origins has softened slightly in the last two weeks from its extraordinarily high levels in February and early March, fresh analysis this week by WorldACD illustrates that tonnages from certain key airports in the region —notably important Asia-Europe sea-air hubs such as Dubai and Colombo— remain significantly elevated compared with this time last year, or compared with the period before the disruptions to container shipping in the Red Sea.
Dubai-Europe and Colombo-Europe tonnages were both down by -9% in week 13 compared with the previous week, but they remain up by 94% and 17%, respectively, year on year.
Combining weeks 12 and 13, Dubai-Europe and Colombo-Europe tonnages were up YoY by 121% and 18%, respectively.
"Although it is difficult to draw meaningful conclusions on the basis of figures for any one or two single weeks, particularly because of the effects of the Easter holiday period, Dubai-Europe demand appears to have softened in the last two weeks from the peak levels in weeks 8, 10 and 11," WorldACD said.
It added that Colombo-Europe tonnages in the last five weeks are down significantly from their peak in weeks 6, 7 and 8.
Southeast Asia road-air developments
Meanwhile, the report said further analysis shows that Asia-Europe traffic via another leading Asia-Europe multimodal hub, Bangkok, also remains significantly elevated compared with this time last year (up 41%), with Bangkok-Europe tonnages in weeks 11, 12 and 13 significantly higher than in the previous three weeks and close to their peak levels this year in weeks 6 and 7.
Air cargo sources in Thailand have indicated that this traffic is being boosted by road-air volumes trucked down from Vietnam and other origin points in southeast Asia. Disruptions to Asia-Europe container shipping have also impacted ocean freight traffic and supply chains.
