The global air freight market saw a continued increase in both volumes and freight rates during the first half of September 2024, according to WorldACD Market Data released on September 20, which covers week 37 (September 9-15, 2024). The report highlights a significant rise in rates from Bangladesh and Japan, along with a notable surge in volumes from Dubai.
During that week, global air cargo volumes grew by 4% compared to the previous week, with significant increases in several geographic regions. The largest growth rates were seen in volumes originating from the Asia-Pacific region (+5%), Central and South America (+6%), and North America (+10%), with the latter partly driven by a rebound following the Labor Day holiday on September 2.
At the same time, average global shipping rates rose slightly, reaching $2.58 per kilogram, with a 1% increase in rates from the Asia-Pacific region, partially offset by a 2% decline from the Middle East and South Asia (Mesa) origins. However, on an annual basis, average global rates from these two regions rose by 24% and 53%, respectively, driving global prices up by 14% compared to the same period last year, and over 50% higher than pre-Covid levels in September 2019. Despite a drop in average rates in some regions, such as North America (-8%), Europe (-8%), Central and South America (-3%), and Africa (-2%), the overall trend indicates a thriving market, poised to handle a strong peak season expected in the fourth quarter.
One of the key trends driving recent developments is the elevated rates from Middle Eastern and South Asian origins, fueled by ongoing disruptions in maritime supply chains due to attacks on vessels in the Red Sea. Since week 14 (April 1-7), spot rates from Mesa origins to Europe have remained more than double the previous year’s levels, with rates from India and Bangladesh showing increases of over 150% for much of the period.
Specifically, spot rates from Bangladesh to Europe have continued to climb, exceeding $5 per kilogram in the past three weeks, driven by political unrest and logistical disruptions affecting this key textile-exporting nation. However, rates to the United States are even higher: in week 37, spot rates from Bangladesh to the U.S. reached $7.49 per kilogram, more than triple the level of the previous year (+219%).
Another area of particular interest is the sharp rise in air cargo volumes from Dubai to the U.S., with a 50% increase in the last four weeks. In week 37, volumes from Dubai tripled compared to the previous year, showing a 275% rise. Meanwhile, spot rates from China and Hong Kong to the U.S. have remained relatively stable in recent weeks, fluctuating between $5 and $5.50 per kilogram, with a 25% year-on-year increase.
However, from other Asia-Pacific origins, including Japan and Southeast Asia, rates have seen significant increases. Notably, in week 37, spot rates to the U.S. from Thailand ($6.79), Singapore ($6.76), and Malaysia ($6.60) reached or approached the highest levels of the year, doubling last year's values.
Japan, in particular, has experienced a spike in rates to the U.S. due to recent disruptions in air services caused by typhoons. In week 37, spot rates from Japan to the U.S. exceeded $8 per kilogram ($8.33), marking the highest level of the year and a 50% increase from the average rates three months ago, in mid-June.
The continued rise in air cargo volumes and rates, combined with strong demand from regions such as the Middle East, South Asia, and the Asia-Pacific, leads WorldACD analysts to predict that the air cargo market is gearing up for a particularly robust peak season in the fourth quarter of 2024. Current market conditions, characterized by disruptions in maritime supply chains, political unrest, and complex logistics in key regions, are likely to support elevated rates and strong air cargo demand in the short term.
