Global air cargo volumes fell again in June — the fourth month of decline in a row — after drops already recorded in March, April, and May, according to the latest data from CLIVE Data Services.

Figures from the Xeneta-owned data provider showed that air cargo demand for June declined 8% year-on-year while the 'dynamic load factor' for the month — based on CLIVE's analysis of both weight and volume perspectives of cargo flown and capacity available to produce a true indicator of airline performance — was nine percentage points behind last year at 59%. 

The drop in the load factor decline comes as demand continues to fall and carriers continue to add capacity to cater to returning passenger demand.

Available cargo capacity in June rose 6% over the same month of 2021 but remained -11% down on the 2019 level.

Meanwhile, CLIVE reported that demand in the general airfreight market in June was 7% lower compared to 2019 and follows the 8% drop in volumes reported in May 2022.

North Atlantic market records steepest decline

Niall van de Wouw, Xeneta chief airfreight officer, noted that the additional summer airline capacity continues to apply downward pressure on airfreight rates, especially on the North Atlantic which has seen a 30% decline over the past three months.

The CLIVE report showed that general airfreight rates in June were 129% higher than in 2019 and 13% higher than in 2021.

It added that although this continues the decline seen on a global level in recent months, the drop slowed relative to May.

"In our analysis of air cargo market performance in May, we said the North Atlantic market could provide a test case for the direction of other markets once they also return to their pre-Covid levels. This is still true, and we may see the consequences sooner than we anticipated a month ago," van de Wouw said, adding that general North Atlantic airfreight rates dropped by around 30% between the first week of April to the last week of June and rates are now "very close to 2020 levels."

van de Wouw warned that this might have an influence on other trade routes and that market demand may be impacted by inflation.

"While flights ex Asia to the US and Europe remain relatively full, we are seeing a subdued North Atlantic market, largely due to more capacity. We have to consider what will be the knock-on effect of a softening air cargo market? Will carriers deploy their freighters to other markets in Asia Pacific, Africa, or South America?"

"We are already seeing some freighter redeployment in the market. It will also be interesting to see the reaction of forwarders that have secured air cargo capacity directly with airlines or through charter brokers or ACMI providers because, in a softening market, more options are available."

"They were willing to pay a price for reliability and their own control, but they may now be considering how much cheaper it could now be to use commercial airline capacity. And, has the 'cost of living' crisis even started to kick in yet? van de Wouw further said.

Rising Covid: another market concern

Rising cases of Covid will be another market concern, he said, as is the continuing struggle to tackle the people drain in the aviation and logistics industries.

He pointed to reports of restrictions on freighter operations at Frankfurt Airport due to labour shortages as well as the recent study by IRU, the international road transport, which shows 2.6 million truck driver vacancies went unfilled in 2021 and forecasts a worsening situation in 2022.

"Relatively low wages and poor working conditions for some workers on the frontline of supply chains, van de Wouw said, means we won't see this struggle disappear anytime soon," the CLIVE report added.