Air cargo tonnages and rates from Asia Pacific are continuing to rise, five weeks on from the Lunar New Year (LNY) dip in early February, as disruptions to container shipping and strong demand for cross-border e-commerce shipments continue to boost volumes and prices, according to weekly figures from WorldACD Market Data.
It said that combined export tonnages from Asia Pacific origin points rose by a further 8% in weeks 10 and 11 (March 4-10 and March 11-17), compared with the previous two weeks (2Wo2W), and by 10% compared with the same period last year.
The air cargo market data provider noted that average rates from Asia Pacific origin points also rose by 8% in weeks 10 and 11, compared with the previous two weeks, although, like most origin regions, rates were down on a year-on-year (YoY) basis — which it said "is not surprising" given that available capacity ex-Asia Pacific is up 19%, year-on-year (YoY).
[Source: WorldACD]
Based on the more than 450,000 weekly transactions covered by WorldACD's data, Asia-Pacific to Europe routes recorded the biggest increases in tonnages (up 15%) on a two-week basis comparison, with rates also up 8%, as disruptions to Asia-Europe container shipping (caused by the attacks on vessels in the Red Sea) and strong e-commerce demand added to capacity and pricing pressures.
It added that Asia Pacific to North America routes also saw increases in tonnages (up 11%) and average rates (up 8%), with e-commerce shipments and water level challenges in the Panama Canal adding to the demand-side pressures, freight forwarders report.
"US freight forwarder C.H. Robinson expects the ongoing Suez Canal crisis will cause rates on Asia to Europe air freight trade lanes to stay elevated and perhaps moderately increase through to the end of the second quarter (Q2) of 2024," WorldACD said in its recent analysis.
It noted that on Trans-Pacific routes, it expects that with production momentum picking up in anticipation of the end of Q1 rush and e-commerce cargo demand growing ahead of Easter, pressure on capacity and rates will likely peak in the last week of March or early April.
[Source: WorldACD]
Middle East & South Asia surge
Meanwhile, WorldaCD said the other big ongoing story at the moment is the continuing surge in demand and rates from Middle East & South Asia (MESA) origin points.
It added that although there has been a slight cooling down in demand in weeks 10 and 11, compared with the previous two weeks (down 3%), tonnages are well up YoY (17%) from MESA, and average rates are increasing even more strongly (up 9%, 2Wo2W and up 23%, YoY).
"This could be related to decreasing capacity in the last 2 weeks since the start of Ramadan, although the impact is typically stronger at the end of Ramadan when there is a holiday period," the analysis further said.
As WorldACD has highlighted in recent weeks, certain Asia-Europe sea-air hubs such as Dubai, Colombo and Bangkok have experienced "exceptionally high air cargo demand" to Europe since the start of this year, in large part linked to the disruptions to Asia-Europe container shipping caused by the attacks on vessels in the Red Sea.
"Further analysis indicates that Dubai-Europe tonnages remain particularly strong, up by 165% in week 11 compared with their level this time last year."
Although Colombo-Europe tonnages were still up 22%, year on year (YoY), in week 11, that compares with the 38% increase seen in week 9 and more than 80% in the three weeks before.
"Nevertheless, fresh analysis by WorldACD reveals that the recent disruptions to container shipping have contributed to a big surge in average air freight rates from South Asia as a whole, with average rates from South Asia into Europe up by 67% in the first half of March (March 1-17) compared with December 2023, and up by 36% into North America," WorldACD added.
Looking at the wider global picture, the air cargo market data provider said total worldwide tonnages in week 11 were "broadly flat" compared with the previous week (down by 1%) and were also flat on a two-week basis, although they were up 4% compared with the same period last year.
Average global rates rose again by 3% in week 11 compared with the previous week to US$2.37 per kilo, roughly their level in the weeks leading up to LNY, and they were also up by 6% on a 2Wo2W basis.
Compared with last year, WorldACD noted that the average global prices are down by around 12%, but they remain significantly above pre-Covid levels (up 32% compared to March 2019).
"Overall worldwide air cargo capacity remains significantly up on last year's levels (up 8%), including capacity ex-Asia Pacific up by 19%, and ex-Central & South America capacity up by 12%," it said.
