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Home » Global air cargo volumes slowed their decline in August, raising holiday peak hopes

Global air cargo volumes slowed their decline in August, raising holiday peak hopes

Freight rates are still far above pre-pandemic levels, but gradual correction continues, Xeneta says.

aircargo Screen Shot 2022-09-07 at 4.20.00 PM.png
September 7, 2022
Supply Chain Quarterly Staff
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Tumbling global air cargo volumes slowed their swift decline in August, offering a glimmer of hope for holiday peak season volumes after four months of a steady slump in demand, according to the latest weekly analysis from Clive Data Services, a unit of ocean and air freight rate analytics provider Xeneta.

Following year-on-year falls in demand of 8% in June and 9% in July, August showed only a 5% drop compared to the same month in 2021, and was just 4% down compared to that pre-pandemic month in 2019.

While those trends are all still negative, the industry is coping well with continuing transportation and supply chain chaos resulting from staff shortages in airports and airlines, Oslo, Norway-based Xeneta said. In addition to the lack of people resources, volatility in the global air freight sector is being triggered by the war in Ukraine, natural disasters, reports of record inventory levels in the U.S., high inflation, and Covid-related lockdowns in cities in China.

Amid that disruption, air cargo rates are also continuing their gradual transition back to the level of three years ago, helped most recently by a cut in jet fuel prices from their historical peak in June, the firm said. All in, general air freight spot rates averaged $3.61 per kilogram in August, the lowest since September last year. This was still +4% versus August 2021 and +113% above the 2019 level, although this latter percentage compared to +156% at the start of 2022, Xeneta said.

“In many respects, this latest data is quite remarkable relative to the two previous months because volumes in August – traditionally the quietest summer month due to the holiday season – levelled out and out-performed June and July when compared to last year’s volumes. The strong dollar and its parity with the euro clearly boosted demand from Europe to North America,” Niall van de Wouw, chief airfreight officer at Xeneta, said in a release.  

Expectations of a “muted” fourth quarter peak season remain, but the August numbers could be an early signal of volumes and rates starting to pick up again, he said.

“Heading into summer, we saw a 15% increase in transatlantic capacity. Now, with a slowdown in global economies expected in the near term, airlines are reporting reductions in their winter schedules, and we are likely to see continued capacity constraints on popular air cargo trade lanes, such as outbound Asia to Europe and North America, and Europe to North America. If the fall in demand is easing, however, as August indicates, that capacity shift could see us return to a seller’s market again,” van de Wouw said.

 


 

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KEYWORDS Xeneta
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