IATA says air cargo demand near 2019 levels

Date Added: 13 September 2022

IATA says air cargo demand near 2019 levels

With a strong presence in the expedited airfreight business through our subsidiary, Davies Turner Air Cargo, we note reports in the international logistics press that air cargo demand continued to track at near pre-pandemic levels in July, but remained below July 2021 performance.

IATA statistics showed global demand, measured in cargo tonne-kilometers (CTKs), fell 9.7 percent overall compared to July 2021, and  fell 10.2 percent for international operations. Demand stood at  minus 3.5 percent compared to July 2019.

Capacity was 3.6 percent above July 2021, and  up 6.8 percent for international operations, but still 7.8 percent below July 2019 levels.

???New export orders, a leading indicator of cargo demand, decreased in all markets, except China which began a sharp upward trend in June.

The war in Ukraine continues to impair cargo capacity used to serve Europe as several airlines based in Russia and Ukraine were key cargo players.

Global goods trade continued to recover in Q2 and the additional easing of COVID-19 restrictions in China will further boost recovery in coming months. While maritime will be the main beneficiary, air cargo is set to receive a boost.

“Air cargo is tracking at near 2019 levels although it has taken a step back compared to the extra-ordinary performance of 2020-2021. Volatility resulting from supply chain constraints and evolving economic conditions has seen cargo markets essentially move sideways since April. July data shows us that air cargo continues to hold its own, but as is the case for almost all industries, we’ll need to carefully watch both economic and political developments over the coming months,” said Willie Walsh, IATA’s director general.

However, according to CLIVE Data Services, part of Xeneta, August offered a glimmer of hope for the global air cargo market as the decline in demand of the previous four months slowed and general air cargo rates between Europe and North America stabilised.

General air freight spot rates averaged USD3.61 per kg in August, the lowest since September last year, benefiting from the cut in jet fuel prices from the historical peak in June. 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, reconfirming the continuing, gradual transition of air freight rates back to the level of three years ago. 

Clive Data Services added that August 2022 market data, however, could be an early signal of volumes and rates starting to pick up again and 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, with westbound load factor remaining above average for the month at 61% and rates stabilising on these lanes.

While expectations of a muted fourth quarter remain due to continued supply chain disruptions, the unexpected deviation from previous months seen in August could signal a better-than-expected end to the year for the air cargo market.

The air cargo market, however, remains chaotic and difficult to predict. Ongoing disruptions due to a lack of people, the war in Ukraine, industrial action, natural disasters, record inventory levels in the US, high inflation and more Covid-related lockdowns in cities in China promise more volatility over the rest of the year.

For more information about its global air freight forwarding and logistics services, please contact aircargo@daviesturner.co.uk or visit https://www.daviesturner.com/air-freight


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