Analysis conducted by WorldACD for the week of January 29 to February 4, 2024 (the fifth week of the year), shows that air shipment rates from China have risen by +14% to North America and by 8% to Europe on a week-to-week basis. Despite these increases, rates remain below the peak recorded in early December 2023. The spike is primarily due to heightened demand for shipments in anticipation of the Chinese New Year, and likely also due to the diversion of shipments from sea to air caused by the Red Sea crisis.
Regarding volumes, WorldACD's data continues to indicate high levels of demand for transport from China to Europe and North America, as well as from the Gulf to Europe, contrasting with the same period last year when traffic was slowing. However, it remains challenging to determine the exact impact of the Chinese New Year, which is still predominant, and the Red Sea crisis on this demand increase. Indeed, the full impact of the Red Sea on air transport will likely only become clear well after the Chinese New Year.
January figures show a +15% increase in tonnage compared to the same month in 2023, with a slight uptick in tonnage in the fifth week - also the last full week before the Chinese New Year - with global average rates rising by about +2% from the previous week. These figures are influenced by the fact that the Chinese New Year fell on January 22 in 2023, with the following week typically experiencing a significant drop in tonnage from the Asia Pacific. However, there has been an underlying trend of higher year-on-year tonnage for several months, supported by strong e-commerce traffic demand from the Asia Pacific since the last quarter of 2023 and with some limited conversions of sea freight to air and combined sea-air transport in recent weeks due to disruptions in container transport in the Red Sea.
Extending the comparison period to two weeks, total combined tonnages for the fourth and fifth weeks of this year have increased by +9% globally compared to the two preceding weeks, with average rates up by 1% and capacity by +2%. Outbound tonnages have increased from all the major global air transport origin regions on a bi-weekly basis, with double-digit percentage increases from Central and South America (+33%) and North America (+10%). Tonnages from Europe have risen by +7%, with increases of +6% from the Asia Pacific, the Middle East, and Africa.
Major intercontinental routes have seen tonnage increases on a bi-weekly basis, with demand from Central and South America to North America recording the highest increase (+44%). This reflects the peak in demand for flowers from South to North America for Valentine's Day. However, these are low-yield shipments, so average rates on that route have decreased by -10%. The highest bi-weekly tonnage increase was from Central and South America to Europe (+17%), although there was also a strong increase from North America to Europe (+16%) and from the Middle East and South Asia to Europe (+13%). This tonnage increase from the Middle East and South Asia to Europe includes some conversions of sea freight to combined sea-air transport due to disruptions in the Red Sea, with average rates on that route slightly increased (+4%).
After seeing strong increases in January, tonnages from Asia Pacific to Europe have been relatively stable in the fourth and fifth week compared to the two previous (+1%), although rates have significantly increased (+6%). And there has been an increase in both tonnages and rates from Africa to Europe by +6%. Other substantial bi-weekly tonnage increases include a surge in transpacific traffic in both directions, increasing by +10% eastbound and +9% westbound, accompanied by a +3% increase in rates in the main direction from Asia Pacific to North America.
Year-on-year comparisons also reveal some significant changes at the start of 2024, largely explained by the difference in timing of the Chinese New Year. Indeed, total global tonnages for the fourth and fifth week of this year have increased by +25% compared to last year, although these figures are strongly influenced by a +70% increase from Asia Pacific. Another significant annual tonnage difference was a +20% increase from the Middle East and South Asia, likely reflecting some conversions of traffic from Asia Pacific to Europe in combined sea-air transport.
On the pricing front, global average rates of $2.35 per kilo in the fifth week are 16% below the high levels recorded in the same period last year, although they remain significantly above pre-Covid levels (+32% compared to February 2019). The overall capacity of global air transport remains above last year's levels (+15%), supported by a +33% increase from Asia Pacific and an +18% increase from Central and South America, with also double-digit percentage increases from the Middle East and South Asia (+14%) and Africa (+10%).
