While the 2024 crystal ball remains cloudy, a glimmer of hope shines for the air cargo industry. Geopolitical turmoil and unpredictable supply chains could create a surge in demand for its reliable services.
December saw promising signs:
- Demand surged 9% year-over-year, partly driven by a weak 2022 comparison.
- Spot rates climbed to their highest in nine months, reaching $2.60 per kg.
- Dynamic load factors rose 3% to 59%, indicating improved utilization.
Niall van de Wouw, Xeneta’s airfreight chief, suggests this signals a potential shift. Shippers, weary of ocean freight disruptions like Red Sea attacks, might seek the “steady state” of air cargo for greater predictability and cost control.
Evidence of this shift:
- Long-term, fixed-rate contracts are back in vogue. In the last quarter, they accounted for 45% of all deals, a 5% jump compared to the previous quarter.
- Short-term contracts are fading. Up-to-one-month rates, dominant during the pandemic, now make up only 14% of the market.
However, cautious optimism reigns. December’s data could be inflated by holiday distortions and a weak 2022 baseline. Xeneta expects a modest 1-2% demand growth and 2-4% supply increase in 2024.
Regional highlights:
- Europe to US: Spot rates soared 21% to $2.42 per kg, fueled by capacity cuts.
- China and Southeast Asia to Europe: Rates rose 9%, reaching $4.49 and $2.91 per kg respectively.
- China to US: Strong e-commerce demand pushed the rate up 6% to $5.12 per kg.
- Southeast Asia to US: Outbound shipments transiting through other Asian countries boosted the rate by 14% to $4.50 per kg.
The road ahead might be bumpy, but air cargo is well-positioned to capitalize on a turbulent world. Airlines and forwarders must focus on cost, reliability, and adaptability to seize the opportunities that arise.
Source: www.aircargonews.net