Global Air Cargo Recovery Remains To Be Seen Amongst Challenging Economic Conditions

Global Air Cargo Recovery Remains To Be Seen Amongst Challenging Economic Conditions

According to the International Air Transport Association (IATA) June saw the smallest year on year contraction in global air cargo markets since February 2022, with a 3.4% decrease in global demand compared to the same time last year.

As at June 2023, demand has decreased 8.1% when compared to the first half of 2022 whilst capacity rose 9.7% compared to the same period, reflecting a current weakened demand environment.

However, the second half of 2023 has seen global air cargo rates remain well above 2019 levels despite increasing capacity rates, which have reached pre-pandemic levels alongside decreased demand across most major trade lanes.

According to air freight analyst WorldACD, this imbalance has seen second-quarter pricing drop 40% year over year, but average air cargo rates in the period were still 34% above those recorded in 2019.

The strength of second-quarter rates compared with pre-pandemic levels is reflected via the main export trades out of Asia eg: Shanghai – North Europe rates averaged $3.34 per kilogram for the quarter (down 53% year over year but up 32% from the second quarter of 2019), average rates on the Shanghai – North America trade of $4.70 per kg were down 47% year over year but up 42% from the same three-month period in 2019.

According to IATA, average yields on the global top 10 international air cargo markets were significantly higher in Q2 2023 but were lower than last year’s levels and higher than their 2019 pre-COVID levels.

The soft Chinese economy, decline in global manufacturing and exports, challenging macroeconomic conditions, inflationary pressures and reduced consumer demand, as well as a persistent inventory overhang are all indicative of a non-peak season for 2023.

Although the global economy appears to have avoided recession and consumer confidence has remained relatively strong throughout the volatility, leading indicators suggest that air cargo demand is not likely to recover until early 2024.

No Comments

Sorry, the comment form is closed at this time.