Air cargo demand continued to increase at double-digit percentage levels in November but the industry managed to avoid supply chain chaos despite the rapid growth.
The latest figures from data firm Xeneta show that air cargo demand increased by 10% year on year in November, the 13th consecutive month of double-digit improvements.
Meanwhile, capacity increased by the lower amount 2% which resulted in a four percentage point improvement in the dynamic cargo load factor to 63% – its highest level in more than 30 months.
Average spot rates for the month were up by 22% year on year to a high for the year of $2.90 per kg.
Xeneta chief airfreight officer Niall van de Wouw said many had been predicting the “peak of all peaks” in November, but he added that the industry had worked ahead of time to ensure that demand levels could be met.
“The peak of all peaks should not be a goal,” he said. “It should be avoided because of the imbalance it creates between winners and losers. 2024 had all the ingredients to see crazy peak season rates but the fact we haven’t seen this situation develop is another sign of the maturity we previously referenced in the global air cargo market.
Source: Xeneta
“What we witnessed in 2023 was a mess and a valuable lesson. In 2024, we are seeing those lessons put into practice.”
He added: “People should not be disappointed. We are witnessing a much more grown-up air cargo market based on better allocation of resources and better terms and conditions between all parties involved.
“The peak in 2023, in comparison, saw a shortage of capacity and rates going crazy, all at the expense of shippers. Why would we want to go back there again?
“The supply chain pressure of a peak of all peaks would have hurt consumers and put unnecessary restraints on relationships. It would have been opportunistic for short-term gains.”
He added that carriers’ pro-active capacity management had helped to curtail any surge in spot rates, which increased by 12% between early September and the week ending December 1, compared with a 25% surge last year.
In the outbound Northeast Asia market spot rates to Europe rose by 13% month-on-month to $5.09 per kg, while spot rates to North America increased 5% to $5.20 per kg.
Spot rates from Southeast Asia to Europe were flat at $4.15 per kg and to North America declined 3% to $6.05 per kg as volumes on the trade eased.
Europe to North America spot rates climbed by 46% from the previous month to $2.72 per kg as passenger airlines took capacity out of the market.
Meanwhile, Europe to Latin America rates rose by 23% to $4.58 per kg as Sao Paulo airport implemented a five-day cargo embargo due to backlogs, which was coupled with ongoing nationwide digital customs delays caused by Brazilian Customs’ strike since November 26.
“Personally, I think the air cargo industry should be proud it has avoided a ‘peak of all peaks’ because this is the basis for greater market stability. I hope this will enable everyone to head into their well-earned Christmas and New Year holidays with a sense of satisfaction, and it enables them to relax and enjoy time with their families and friends,” van de Wouw said.
“In 2024, the industry has shown its maturity. We must wait and see if this holds when the market goes down, but I don’t see that happening just yet.”
Source: Xeneta
