Trace
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November 11, 2024
The Future of Air Cargo: Why 2025 Will Be a Game-Changer
In a rapidly changing global landscape, air cargo is emerging as a key player in the supply chain...
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March 8, 2024
February 2024 brought a series of challenges and shifts in the freight forwarding industry, marked by disruptions in air and ocean freight due to the Red Sea crisis, Lunar New Year considerations, and ongoing container shipping issues. The global supply chain faced complex dynamics, impacting air cargo demand, ocean freight rates, and vessel schedules.
Here's a comprehensive recap based on data from various sources, including WorldACD, Sea Intelligence, and industry updates.
Global Trends
January witnessed a remarkable surge in worldwide air cargo demand, showing a significant increase compared to the previous year, with the exception of ex-North America traffic.
Challenges in international container shipping, coupled with disruptions in the Red Sea, led some cargo owners to shift Asia-Europe cargo from sea to air or sea-air, contributing to the rise in air cargo demand.
Despite tripled ocean freight spot rates, global air cargo rates remained relatively stable, emphasizing the resilience of the air cargo sector.
Regional Insights
Weeks 2 and 3 of 2024 saw a 6% increase in overall global demand, notably from the Middle East and South Asia, Africa, and Asia Pacific.
Price-wise, average yields rates of US$2.25 per kilo in week 8 are -18% below their levels this time last year, with rates ex-Europe and ex-North America down by -31% and -21%, respectively, and prices ex-Asia down by -14%, while rates ex-Middle East & South Asia are up by +9%, YoY. Nevertheless, average global rates remain significantly above pre-Covid levels (+26% compared to February 2019).
Capacity and Rate Adjustments:
Global international air cargo capacity increased by 10% from January 1-28, 2024, compared to 2019.
The Red Sea crisis and Lunar New Year contributed to a 30-40% drop in air cargo capacity out of China and Hong Kong.
Yields for Transpacific and Asia-Europe routes increased in the last weeks of January, driven by the Red Sea crisis and Lunar New Year anticipation.
Red Sea Disruptions:
Ocean freight rates continued to increase into the first half of February due to persistent Red Sea disruptions, causing delays in vessels traveling back to Asia.
Container deficits and equipment issues were reported across major wet ports, affecting carrier-specific services.
TAWB and FEWB Sectors:
TAWB sector experienced stable demand with no peak expected in February, but capacity was expected to decrease by 15-20%.
On-time performance declined from 72% in July 2023 to 50% in December 2023, attributed to weather-related issues during winter months.
In the FEWB sector, the Red Sea crisis impacted market development, leading to delays, void plans, and equipment shortages.
Rate Adjustments and Capacity Challenges:
Red Sea-related surcharges led to rate adjustments, raising uncertainties about long-term pricing impacts.
Massive void plans and capacity adjustments created challenges for shippers, emphasizing the need for strategic planning and flexibility.
February 2024 presented multifaceted challenges in the freight forwarding industry, from disruptions in air and ocean freight to shifts in global supply chain dynamics. As stakeholders navigate uncertainties, adaptability, strategic planning, and collaboration remain key to sustaining operational efficiency. The industry anticipates ongoing adjustments, emphasizing the need for continuous monitoring and proactive responses to emerging trends and challenges.
https://www.sea-intelligence.com/press-room
https://www.worldacd.com/trends/weekly-trends-archive/
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