Dive Brief:
- Freight forwarders are working with shippers to strategize how to manage a shifting air cargo market landscape as peak season approaches, Xeneta’s Chief Airfreight Officer Niall van de Wouw said in a Sept. 5 report.
- E-commerce volumes remain a major market indicator, with exported goods from China already up 30% this year, Xeneta reported. In July alone, there were reportedly 37 million downloads of the Temu app.
- Van de Wouw said that shippers should be “nervous” for Q4. “We expect to see a seller’s market out of Asia and across the Atlantic due to the latter’s reduction in winter capacity. We’ve had a hot summer, and we may have an even hotter autumn ahead.”
Dive Insight:
The average air cargo spot rate reached its largest year-over-year growth of 24% to $2.68 per kilogram, Xeneta reported.
On a corridor level, rates on shipments bound for North America saw the largest monthly increase from July — which is typically regarded as the industry’s “slack season.”
Rates from Europe to North America, for instance, were up 7% month over month to $1.77 per kilogram in August, possibly due to the “surging transshipments originating from Asia,” according to the report. Meanwhile, Southeast and Northeast to North America rates were up 6% MoM and 4% MoM to $6.15 per kilogram and $4.68 per kilogram, respectively.
August air freight by the numbers
11%
YoY percentage increase in global air cargo demand
$2.68
The average spot rate per kilogram
30%
YoY growth of e-commerce and low-value shipments from China to the U.S. in the first seven months of the year
58%
The global dynamic load factor, which measures the volume and weight of cargo flown, as well as available capacity
While rates benefited from ongoing balance in supply and demand, global air cargo demand was impacted by the modal shift from ocean to air due to Red Sea disruptions in addition to strong e-commerce growth, per the report. In August, cargo demand was up 11% YoY.
“Rates we saw bottoming out in late July started picking up again in mid-August. This is too short a period to call a season,” said van de Wouw. “This has been a busy summer, and now we’re at the threshold of Q4, it will be interesting to see what will happen and if all the anticipation of a red hot peak season materialises.”
As preparations for peak season unfold, some companies announced surcharges as shippers and freight forwarders look to secure capacity. DHL Express, for instance, plans to implement surcharges starting Sept. 15, and van de Wouw speculated whether “the peak surcharges some carriers plan to implement will hold.
Other companies are creating more market capacity, including freight forwarder Dimerco Express Group which is launching a new weekly air freight charter service on Sept. 15 between Shanghai and Chicago. CMA CGM Air Cargo, meanwhile, recently launched its first Transpacific connection connecting Hong Kong and Chicago.