Even in the eleventh week of 2024 (March 11-17), the growth of air cargo shipments from the Asia Pacific region continued. According to WorldACD Market Data, this marks the fifth consecutive week following the Chinese New Year to register such a trend, driven both by obstacles in container shipping caused by the Red Sea crisis and by an increase in international e-commerce demand.
Data released by WorldACD Market Data on March 22, 2024, shows that exported tonnages from Asia Pacific locations saw an 8% increase in weeks ten and eleven compared to the previous two weeks, and a 10% increase compared to the same period last year. Average rates also grew by 8% in these weeks compared to the previous ones in 2024, although they remain lower compared to the corresponding weeks in 2023.
Routes from Asia Pacific to Europe recorded the most significant increases in terms of tonnage (+15%) on a bi-weekly basis, with rates increasing by +8%, due to obstacles in container shipping (caused by attacks on ships in the Red Sea) and strong e-commerce demand, which added pressure on capacity and prices. Routes from Asia Pacific to North America also showed increases in tonnages (+11%) and average rates (+8%). In this case, the push comes from restrictions on ship transit through the Panama Canal (caused by drought) and the increase in e-commerce.
WorldACD reports that the US freight forwarder C.H. Robinson expects that the ongoing Suez Canal crisis will keep rates for air routes from Asia to Europe high, and they may even moderately increase until the end of the second quarter of 2024. For trans-Pacific routes, it anticipates that with the revival of production at the end of the first quarter and the growing demand for e-commerce in view of Easter, pressure on capacity and rates will likely peak in the last week of March or early April.
Another significant development is the continuous increase in demand and rates from the Middle East and South Asia (MESA) origin points. Although there was a slight decrease in demand in weeks ten and eleven compared to the previous two (-3%), tonnages have significantly increased on a yearly basis (+17%) from MESA, while average rates have grown more markedly (+9% bi-weekly and +23% yearly). This increase could be related to the reduction in capacity in the last two weeks, following the start of Ramadan, although the impact is typically stronger towards the end of this occurrence, when there is a holiday period.
As highlighted by WorldACD in recent weeks, some maritime and air hubs between Asia and Europe - such as Dubai, Colombo, and Bangkok - have recorded exceptionally high demand for air cargo to Europe since the beginning of 2024, largely due to obstacles in maritime transport. Further analysis indicates that tonnages from Dubai to Europe remain particularly high, with a 165% increase in week eleven compared to the same period last year, although they are slightly lower (-10%) compared to the extraordinary levels of the previous week.
Despite tonnages from Colombo to Europe still increasing by 22% yearly in week eleven, this compares with +38% in week nine and more than +80% in the three weeks prior. A new analysis by WorldACD reveals that issues in container shipping have contributed to a significant increase in average air freight rates from South Asia as a whole, with average rates to Europe up by +67% in the first half of March (1-17 March) compared to December 2023, and by 36% to North America.
Looking at the broader global picture, the total worldwide tonnages in week eleven remained broadly unchanged compared to the previous week (-1%), and were also flat on a bi-weekly basis, although they increased by +4% compared to the same period last year. Global average rates increased again (+3%) in week eleven compared to the previous week, reaching $2.37 per kilo. This value is similar to that of the weeks before the Lunar New Year and also increased by 6% on a bi-weekly basis. Compared to 2023, global average prices have decreased by approximately 12%, but remain higher than pre-Covid levels (+32% compared to March 2019).
Overall, global air cargo capacity remains above 2023 levels (+8%), including capacity from Asia Pacific increased by 19%, and from Central and South America by 12%. WorldACD believes that current trends suggest a continuous evolution of the sector, with a significant impact on global trade and the international supply chain.
