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Rising e-commerce and a modal shift from ocean to air freight due to ongoing Mideast conflicts continue to boost air volumes
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Global air cargo demand remained solid in May 2024 and was up 9% year-on-year, according to the recent DHL Air Freight State of the Industry report
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Global air cargo spot rate sees first year-on-year increase in April 2024 since August 2022
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Cargo yields in India, China, and Southeast Asia remain high, leading to re-positioned flights for airlines to capitalize on these opportunities
Rising e-commerce and a modal shift from ocean to air freight due to ongoing Mideast conflicts are continuing to boost air volumes, according to the recent DHL Air Freight State of the Industry report.
Global air cargo demand remained solid in May 2024 and was up 9% year-on-year, the report said.
Leading demand growth are the Asia Pacific- Europe and Middle East/Africa-Europe routes.
Cargo yields in India, China, and Southeast Asia remained high, leading to re-positioned flights for airlines to capitalize on the opportunities, the report added.
Global air cargo spot rate saw first year-on-year increase in April 2024 since August 2022, amid geopolitical disruptions and strong e-commerce demand.
The report noted shippers prefer “long-term contracts for stability, competitive rates and reliable operational performance.”
“As Chinese e-retailers continue to seek U.S. market expansion, we are expecting this boost in air cargo demand to hopefully, sustain itself until the peak season begins in October,” the report said.
Global air cargo capacity is at plus 11% year-on-year versus May 2023, almost exclusively driven by passenger belly cargo increase.
Capacity is expected to remain stable across most regions, except for specific trade lanes where high demand is causing constraints, the report noted. Overall, capacity from Asia to the US, EU and Middle East/Africa remains tight.
But airfreight capacity demand is expected to ease around the Indian subcontinent amid the unsettled Red Sea disruptions as businesses adapt to longer lead times.
For rates, the report said OPEC+ production cuts and geopolitical risks can be expected to see Brent Crude oil spot price hovering at $90/barrel for the rest of the year.
Economic indicators indicate continued stability in global manufacturing, with growth expected to continue at a slow but stable pace until next year.
In terms of regional markets, the European market is projected to experience relatively weak growth; Middle East/Africa rates will be higher due to strong demand caused by disruptions to container shipping; and the US export market will stay soft, while import volumes have increased due to the Red Sea crisis impacting capacity and rates.
The DHL Air Freight Report for May sees global inflation to decline gradually in 2024-25 due to “supply-demand rebalancing.”
Disruptions in certain areas are seen to continue, with Red Sea conflicts “expected to prolong congestion at many central seaports around the world, impacting air cargo market and rates.”
Specifically, heightened demand for transporting materials to France ahead of the summer Olympics could conceivably tighten space, even as Canada expects ocean strikes, potentially raising air freight demand.
DHL’s State of the Industry is a monthly report by DHL Global Forwarding that tracks and analyses the latest developments of the global air freight market.
