Global air cargo markets are showing signs of slowdown after the unprecedented highs in the past months as lingering economic and political turmoil continues to drag growth.

Seasonally adjusted general air cargo market performance data for July showed a "continued slowing down" of volume, load factor, capacity, and airfreight rates according to CLIVE Data Services, as the impact of economic and political uncertainties on the world trade continues to hang over the industry.    

The ocean and air freight rate benchmarking, market analytics platform and container shipping index, which is now part of Xeneta, showed volumes dropped -by 9% in the first month of the third quarter compared to July 2021.

Demand was also down by 9% versus the same month of 2019 and capacity growth slowed to just 4% over the July 2021 level and was down 11% to July 2019.

This caused CLIVE's 'dynamic load factor' ⁠measure to drop by 8% pts year-over-year to 58%.

Slowing air cargo market

Airfreight rates, meanwhile, also continued to fall in July, relative to the June 2022 year-over-year analyses although they remain at +121% versus July 2019 and +11% compared to the same month a year ago.

"The slowdown in the global air cargo market since March 2022 is ongoing," said Niall van de Wouw, founder of CLIVE and now chief airfreight officer at Xeneta, with no let-up in the multitude of disruptions outside of the industry's control such as uncertainties caused by the continuing war in Ukraine to the escalating 'cost of living' crisis and its impact on household budgets and business performance.

Aside from this, airlines and airports also continue to suffer severe operational challenges due to significant shortages of ground staff.

"There are many dark clouds hanging over the air cargo industry given the state of the world right now," van de Wouw said.

"Volumes are subdued, and while air cargo rates are still elevated, they are slowly but surely easing back towards pre-Covid levels," he added. "From a rates point of view, indicators suggest the market has yet to bottom out."

Rates dropping, but still elevated

The CLIVE founder noted that airlines are following the market "very closely" to ensure they are deploying their assets in the best possible way as the market moves very quickly.

For instance, he noted that CLIVE has already seen freighters moving away from transatlantic routes.   

"The slow slides in rates, compared to 2019 and 2021, continue by a handful of percentages each month. In January, rates were +156% compared to the same month in 2019. Now this figure is 121% or a reduction of 35% pts on a global scale," van de Wouw said.

He went on to note that on the Atlantic, the decline in general airfreight rates we reported for the previous three months of 2022 continued in July.

"While this will be partly seasonal,  the slight increase in load factor across the Atlantic relative to June – from 58% to 61% - might be a result of carriers and forwarders redirecting their freighter operations to other lanes, hence pushing up the load factor for the remaining flights on these routes," van de Wouw added.