Global airfreight activity eased in the first full week of August as worldwide tonnage fell from all major origin regions, while capacity and pricing also eased lower.
Global chargeable weight was down 4% WoW in Week 32 (3-9 August) according to the latest WorldACD data. The fall was seen across all origin regions, after a marginal rebound last week.
The steepest decline was in the Middle East and South Asia (MESA), where tonnage fell 6 percent. Europe and North America were each down 4% and Asia Pacific was down 3% in volumes. Africa and Central & South America (CSA) both dropped 2%.
Despite the weekly setback, global traffic was still 1% higher than the same period last year. Year-on-year, most origin regions experienced 1% or 2% growth, except for Europe which declined by 1%.
Global volumes remain stuck in a tight range
WorldACD data shows that over the past four weeks global airfreight traffic has continued to trade in a relatively tight range of weekly gains and losses.
Comparing the latest two-week period to the preceding two weeks, global chargeable weight fell 1%. Volumes in Asia Pacific were down 2% and traffic in North America was 3% lower. MESA and Europe both saw 1% growth with flat volumes from Africa and CSA.
Asia Pacific traffic was soft on Europe and North America-bound routes and intra-regional services. The only exception was traffic to MESA, which was up 1 percent.
CSA traffic was up 2% while North American exports to the Asia Pacific region fell 6%, down 5% to Europe.
European exports increased 3% to North America and MESA, decreased 1% to Asia Pacific and Africa and remained flat to CSA.
Increasing pressure on Asian exports
Exports to both Europe and the United States fell 4%, with exports to the Asia Pacific region under particular pressure in Week 32.
Most Asian origins saw lower volumes tho Japan saw a 12% increase in chargeable weight to the USA and a 3% increase to Europe.
For exports to the USA, tonnage fell from most other Asian origins. Taiwan saw an 11% decline, followed by Indonesia with a 10% drop. Malaysia was the exception with 4% increase.
Europe also experienced sharp weakness in volumes from several origins. Indonesia down 18%, Taiwan 14% and Malaysia 12%.
Weather disruptions added to the squeeze. Typhoon Dolphin disrupted parts of China, with evacuations ordered in Shanghai and Beijing and more than 1,000 flight cancelations in Shanghai alone.
The storm also shut the Port of Shanghai and other Chinese sea gateways, possibly prompting some exporters to shift cargo from ocean freight to airfreight.
However, overall chargeable weight from Shanghai decreased by 8% WoW, with declines of 4% to North America, 7% to Europe and 12% on intra-Asia Pacific routes.
Total chargeable weight down 5% in China. Beside the typhoon effect, Chinese exports to Europe continued to be affected by the expiration of the EU’s “de minimis” exemption on e-commerce shipments.
This is most evident if we examine year-on-year figures, with chargeable weight from mainland China to Europe down 8%, while Hong Kong to Europe traffic fell 29%.
MESA traffic slips too
MESA-Europe traffic down 11% WoW, with the majority of origins in the region experiencing mid-high single digit declines.
Sri Lanka alone bucked the trend, with traffic up 15%.
Traffic to MESA-Europe declined 13% year-on-year, driven by a 62% decline from Dubai and a 4% decline from India.
Exports to the USA from MESA fell 1%. Strong traffic from Dubai, up 37%, and Bangladesh, up 15%, offset a 23% drop from Colombo and an 8% decline from India.
Capacity is largely the same
Global airfreight capacity was down 1% WoW, decreasing only slightly over the week.
Capacity was down 1% in Asia Pacific, MESA and North America and unchanged in Europe and CSA. Africa was the only region of origin to increase capacity, up 1%.
Capacity has remained relatively flat since Week 27 (Jun 29 – Jul 5). Since then, weekly moves have mostly stayed within a tight plus-minus 1% band, with only low single digit moves in individual regions.
Average rates fall to US$2.95/kg
Prices also continued to soften, partly due to lower fuel costs.
The average global airfreight rate eased a little from US$2.96 per kg in Week 31 to US$2.95 in Week 32. That follows a drop from US$3.00 per kg in Week 29.
European rates were up 1% WoW, while rates from Asia Pacific, CSA and North America were flat. MESA rates fell 1%, with Africa recording the biggest weekly fall at 5%.
Even after the recent easing, global rates were still 22% higher than a year ago. Year-on-year increases ranged from 8% for CSA to 48% for MESA.
Spot rate from Asia Pacific to Europe rose 1% WoW. The biggest increases were in China, where rates rose 6%, and Hong Kong, which saw a 3% increase.
The gains offset lower rates from other Asian markets, including South Korea down 6% and Singapore down 5%, Taiwan down 4% and Japan down 4%.
Over the Pacific the story was different. Asia Pacific spot rates to USA declined 3% with single digit declines from most origins Hong Kong rose 3%, Thailand was up 1% and Vietnam was flat.
Freighter capacity may be in flux
Rising China and Hong Kong to Europe pricing, despite the end of the European Union’s de minimis exemption, coupled with falling Asia Pacific to USA rates could signal a change in how freighter capacity is being deployed.
The data suggest that some freighter capacity that used to carry e-commerce goods from Asia to Europe may have been rerouted to other markets, with the transpacific trade lane looking like the most obvious beneficiary.
The latest numbers for the global air cargo market indicate continued pressure on volumes, especially from Asia, while capacity remains relatively controlled and rates well above last year.
