Tuesday, July 16, 2024
Early Chinese New Year impacts global air cargo demand

Early Chinese New Year impacts global air cargo demand

This year’s early Lunar New Year has interrupted air cargo’s normal January recovery, with falling tonnages to and from China and Hong Kong pulling down overall worldwide volumes into a mid-month deficit.

In the third full week of January 2023, global air cargo tonnages fell back into a slight decline, following the delayed post-holiday upswing that WorldACD reported last week. In the same period last year, global air cargo tonnages were increasing. Although this drop in demand may be in line with expectations as the global economy is softening, the shift of Chinese New Year – this year starting on 22 January versus last year on 1 February – is a large contributor to these most-recent dynamics, the latest preliminary figures from WorldACD Market Data indicate.

Read more: Delayed post-holiday recovery in airfreight demand

Figures for week 3 (16 to 22 January) show a decrease of -3% in worldwide tonnages compared with the previous week, while last year in the same period an increase of +3% was observed. When looking at the flows excluding Mainland China and Hong Kong, air cargo tonnages remain stable overall in week 3 compared with the previous week, whereas flows inbound Mainland China and Hong Kong dropped by -26% and outbound Mainland China and Hong Kong by -5%, compared with the previous week. Globally, the average air cargo rate remained stable in week 3 compared with the previous week, a similar trend as last year in the same period.

Comparing weeks 2 and 3 with the preceding two weeks (2Wo2W), tonnages increased +19% above their combined total in weeks 52 and 1, with a +6% increase in capacity, while average worldwide rates remained flat – based on the more than 400,000 weekly transactions covered by WorldACD’s data.

Read more: No upswing in demand for airfreight at the start of 2023

Despite the lower tonnages compared with the previous week, overall they were still up from almost all regions in this two-week period, given the strong recovery in week 2. On a regional level, tonnages between all regions were on a positive trend, except for outbound Middle East & South Asia to Asia Pacific (-16%), on a 2Wo2W basis. The largest increases were recorded on flows from Europe to North America (+44%) and to Central & South America (+43%), respectively, and from North America to Central & South America (+34%) and to Europe (+33%), respectively (2Wo2W).

Year-on-Year perspective

Comparing the overall global market with this time last year, chargeable weight in weeks 2 and 3 was down -22% compared with the equivalent period last year. Notably, tonnages ex-Asia Pacific are down by -30% below their strong levels this time last year and ex-North America are down by -24%. But there were also double-digit percent year-on-year drops in tonnages outbound from Europe (-17%) and Middle East & South Asia(-17%).

Overall capacity has increased by +11% compared with the previous year, with positive developments from all regions, most notably ex-Africa (+21%), ex-North America (+13%) and ex-Middle East & South Asia (+12%).

Worldwide rates are currently -24% below their levels this time last year, at an average of US$3.07 per kilo in week 3, despite the effects of higher fuel surcharges, but they remain significantly above pre-Covid levels.

Picture of Edward Hardy

Edward Hardy

Having become a journalist after university, Edward Hardy has been a reporter and editor at some of the world's leading publications and news sites. In 2022, he became Air Cargo Week's Editor. Got news to share? Contact me on Edward.Hardy@AirCargoWeek.com

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