After several years of volatility, the air cargo market is anticipated to stabilize in 2024, with a return to “classic seasonality.” However, industry experts caution that unforeseen events could still cause turbulence.

Data provider Xeneta projects modest growth of 1-2% for air cargo volumes in 2024, while supply is expected to increase at a slightly higher rate of 2-4%. This subdued growth is attributed to continued muted consumer spending.

Niall van de Wouw, Xeneta’s chief airfreight officer, views the low growth and calmer market as an opportunity for shippers to recover from the volatility of recent years. He acknowledges the uncertain global economic outlook and muted consumer spending, which will likely dampen demand growth.

While 2024 is expected to bring a return to classic seasonality, van de Wouw cautions that it will be muted. He highlights several potential risks to the market, including:

Mismatched Contract Terms: Shippers are securing long-term contracts with forwarders, while forwarders are buying from airlines on the spot market. This discrepancy could lead to issues if market conditions change abruptly.

Capacity Additions: Increasing capacity from new aircraft deliveries could put downward pressure on rates.

Environmental Sustainability: Airlines will face pressure to reduce their carbon footprint, which could impact rates.

Ocean Freight Disruptions: Increased ocean freight disruptions, such as the Panama Canal drought and the ending of the European block exemption for ocean carriers, could push shippers towards air cargo.

Despite these potential risks, van de Wouw believes that overall, 2024 will be a calmer year for airfreight. However, he warns that a single unexpected event could trigger another rollercoaster ride for the industry.

The air cargo industry’s sensitivity to global events is evident in recent disruptions, such as the Panama Canal drought, volcanic eruptions in Iceland, and conflicts in the Middle East. A similar unforeseen event in 2024 could destabilize the market once again.

In conclusion, while the air cargo market is expected to stabilize in 2024, industry experts remain cautious about potential disruptions. Shippers should be aware of the risks and consider contingency plans to ensure smooth operations.

Source: Xeneta