Several key Asia-Europe sea-air hubs have recorded a strong surge in tonnages in the last few weeks, as shippers continue to seek alternative logistics solutions due to the disruptions to container shipping caused by the attacks on ships in the Red Sea.

Freight sources have reported, anecdotally, that some Asia-Europe sea-air hubs such as Dubai, Colombo and Bangkok have been inundated with air cargo in recent weeks, as cargo owners seek to replenish stocks in Europe that have run low – because containerships that would normally transit via the Suez Canal have been forced make the longer voyage around the Cape of Good Hope. And in-depth analysis this week by WorldACD Market Data can confirm that air cargo tonnages to Europe from Dubai, Colombo and Bangkok have been at significantly elevated levels this year compared with the equivalent period last year.

Analysis, based on the more than 450,000 weekly transactions covered by WorldACD’s data, reveals that in the first seven weeks of 2024, all three of those sea-air hubs have seen their respective flown tonnages to Europe rise by more than 50% compared with the first seven weeks of 2023, with Dubai-Europe traffic up +71%, Colombo-Europe tonnages up +61%, and Bangkok-Europe volumes up +58%, year on year (YoY). But despite some reports of elevated traffic volumes to Europe via Singapore and Doha, Singapore-Europe and Doha-Europe tonnages were up, YoY, by just +10% and +3%, respectively, in the first seven weeks of this year.

The later timing of Lunar New Year (LNY) this year on 10 February, compared with 22 January last year, makes precise and week-by-week comparisons difficult, but across the first seven weeks as a whole, there is a clear pattern of elevated tonnages to Europe from Dubai, Colombo and Bangkok. The patterns are less clear in terms of pricing, because of multiple variables at play including LNY and the market-wide decline in pricing compared with this time last year. 

And it’s unclear currently whether the elevated demand for sea-air solutions will continue significantly beyond the LNY period, with ex-Asia Pacific normally associated with a spike in demand leading up to LNY followed by a subsequent fall in tonnages and prices. Tonnages in week 7 (12 to 18 February) remained up, YoY, to Europe from Dubai, Colombo and Bangkok. Dubai-Europe gains have almost tripled in week 7 to +161%, YoY, while the previous three weeks stood at +89%, +93% and +77%. Colombo-Europe volumes in week 7 were more than double (+112%) the levels of week 7 in 2023 and Bangkok-Europe tonnages also remained highly elevated (+68%).

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Global comparisons

Meanwhile, the global picture shows the effects of the traditional seasonal decline in demand ex-Asia Pacific in the days following LNY, with a big decline in tonnages ex-Asia Pacific pushing down overall tonnages in week 7 by a further -10%, following a similar tonnage drop in week 6. Looking at average global rates, we see a week-on-week (WoW) drop of -6% in week 7 this year, compared to a -8% WoW decline in the equivalent post-LNY week (week 4) last year, consistent with a broadly similar seasonal pattern. Those average global yield declines can be explained as a “mix effect”, with reduced high-yielding volumes ex-Asia Pacific causing a drop in the global average, and not by individual rates decreasing. 

Expanding the comparison period to two weeks, total combined tonnages for weeks 6 and 7 this year were down by -14%, globally, compared with the preceding two weeks (2Wo2W), with average rates stable and capacity down by -4%. The dominant effect of LNY on these figures can be seen in the -25% drop in tonnages, 2Wo2W, from origin region Asia Pacific. Even after that -25% drop, 2Wo2W, those tonnages are still at almost the same level as in weeks 6 and 7 last year (-1%), despite LNY occurring almost three weeks later this year, pointing towards a structural improvement compared with last year.

Meanwhile, tonnages from the Central & South America origin region were also down significantly (-27%), 2Wo2W, but this was principally due to a spike in flower shipments ex-Central & South America in previous weeks ahead of Valentine’s Day on 14 February. 

The only origin region in weeks 6 and 7 this year to record an increase in tonnages, on a 2Wo2W basis, was Middle East & South Asia (+2%), mainly driven by a +6% rise to Europe. And Middle East & South Asia was the only origin region to show a significant rise (+11%) in average rates, 2Wo2W, with Middle East & South Asia to Europe the only major intercontinental lane to show a significant rise in average prices (+18%) – most likely a reflection of the surge in recent weeks of Asia Pacific to Europe traffic converted to sea-air.

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Year-on-year perspective

Year-on-year (YoY) comparisons show a -1% decrease in total worldwide tonnages for weeks 6 and 7, combined, compared with last year, despite LNY occurring almost three weeks later this year, again suggesting a structural improvement in demand levels compared with last year. With most origin regions showing a small to moderate YoY decline, origin region Middle East & South Asia was again the outlier, recording a YoY rise of +22% – likely a further indication of the conversion of Asia Pacific to Europe ocean freight to sea-air volumes.

On the pricing side, average worldwide rates of US$2.24 per kilo in week 7 are -16% below their levels this time last year, with rates ex-Europe and ex-North America down by -32% and -21%, respectively. Nevertheless, average global rates remain significantly above pre-Covid levels (+26% compared to February 2019). 

Overall worldwide air cargo capacity remains significantly up on last year’s levels (+9%), with, most notably, double-digit percentage increases ex-Asia Pacific (+18%) and ex-Middle East & South Asia (+11%).