Whatever is happening in the rest of the world’s economy, the air freight sector is booming.
IATA’s latest market statistics show that in October air freight ‘cargo-tonne kilometres’ grew at an annualised rate of 9.8%, representing the fifteenth month of continuous growth. In particular, international cargo demand grew very quickly, with cargo-tonne kilometres on these routes up 10.3% year-on-year.
Although demand in Asia-Pacific was generally good it was Latin America which has been the most dynamic market in October, with growth in the month hitting 17.6% year-on-year. Much of this trade was with the US and the dynamism of economic relations has been reflected in strong expansion in passenger traffic as well.
Whilst growth within Asia was also strong, up 15% year-on-year, traffic was also firm between Asia and Europe, which was up 14.3%. However, volumes between Asia and North America were less strong, with a year-on-year growth of 8.6%. This begs the question of why a market such as North America, which has robust consumer demand, is seeing lower levels of growth than other regions. Undoubtedly part of the explanation is the continuing shift in Asia-Europe consignments using air-freight rather than sea-freight as a result of the Red Sea crisis. However, there may be other factors. Exports out of China continue to be high, amplified by activities of the Chinese-based e-retailers.
Yet the impact of Chinese e-retailers ought to also boost trans-Pacific volumes at least as much, as US internet retail growth remains much healthier than many other developed markets. The contrast between the two figures suggests that exceptional issues, such as the Red Sea crisis, are more important than might be expected. Therefore, if there is any improvement to the accessibility of the Suez Canal, it may not just be the container market that is impacted. This is all the more the case as available capacity in air freight is not so tight, with belly-freight availability at record highs and freighter volumes increasing in October by 5.6% year-on-year, boosting the overall freighter capacity to levels approaching that of the extraordinary conditions in 2021.
Source Ti Insight
Author: Thomas Cullen
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