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WorldACD Weekly Air Cargo Trends – week 15

Eid weakens demand but rates hold firm

Following successive weekly rises since the end of February, average global air cargo rates held steady in the second week of April – equaling their level in the equivalent week the previous year for the first time since mid-2022 – despite a drop in tonnages partly linked to Eid.

According to the latest weekly figures and analysis from WorldACD Market Data, total worldwide tonnages fell by -3% in week 15 (8-14 April), with particularly big week-on-week (WoW) declines from predominantly Muslim countries including Pakistan, Bangladesh and the UAE.

Average global rates remained flat in week 15 at US$2.52 per kilo, following consecutive weekly WoW rises of between +2% and +3% in the previous six weeks, equaling their level in week 15 last year and significantly above pre-Covid levels (+40% compared to April 2019), based on the more than 450,000 weekly transactions covered by WorldACD’s data. Average worldwide rates peaked at US$4.28 per kilo in late 2021 and mostly continued falling until the second half of last year, when they stabilized at around $2.30 per kilo and recovered somewhat in the fourth quarter (Q4) last year, and again since late February 2024.

Eid effects on tonnages

Air export tonnages from South Asian countries including India, Pakistan and Bangladesh remain high compared with their normal levels for this time of year, especially to European destinations, linked to strong demand developments combined with supply issues caused by disruptions to ocean shipping. But a drop in bookings during the Eid holidays at the end of Ramadan led to some steep WoW falls in tonnages in week 15 ex-Pakistan (-41%), Bangladesh (-14%) and the UAE (-29%) to worldwide destinations, along with other countries with big Muslim populations such as India (-18% worldwide, and -16% to Europe destinations). Tonnages from the Middle East & South Asia (MESA) region overall to Europe also dropped by -18%, WoW, although they remain up by +17% compared with the same week last year.

Despite the WoW drop, India-Europe tonnages remain up +9%, year on year (YoY), although Bangladesh to Europe demand is slightly down (-5%), YoY. Meanwhile, Sri Lanka to Europe tonnages were up on both a WoW (+8%) and YoY (+26%) basis in week 15. And despite a -21% WoW drop, Dubai-Europe tonnages remained at more than twice their level this time last year, up by +153%, in the week prior to flooding there, impacting the emirate’s air operations.

High MESA-Europe spot rates

Further in-depth analysis this week by WorldACD reveals that despite the WoW dip in demand from various MESA countries, including to Europe, air cargo spot rates from that region to Europe remain extremely high by historical standards. Indeed, MESA to Europe spot rates as a whole are more than double (+122%) their level this time last year, with India-Europe spot rates still averaging more than $4 a kilo in week 15 ($4.05/kg) despite a -2% WoW drop, leaving them up by +174% compared with week 15 last year. Bangladesh-Europe spot rates edged up slightly further in week 15 to $4.61 a kilo (+176%, YoY). Meanwhile, Sri Lanka-Europe prices are up +53%, YoY, with Dubai-Europe spot prices +33% above week 15 last year.

Expanding the comparison period to two weeks, average worldwide rates in weeks 14 and 15, combined, rose by +4% compared with the previous two weeks (a 2Wo2W comparison), despite a -9% drop in global tonnages, 2Wo2W, and relatively stable capacity (-1% worldwide), propped up by a +7% 2Wo2W increase in rates from Asia Pacific origin points and a +5% rise from MESA origins.

The rise in rates from Asia Pacific and MESA origin points comes despite a 2Wo2W decline in tonnages (-8% and -7%, respectively) from those two regions, and relatively stable available capacity (-3% ex-Asia Pacific and -1% ex-MESA). Rates from Europe (+2%) and Africa (+2%) held firm despite significant 2Wo2W declines in tonnages, including a -15% fall ex-Europe and a -17% decline ex-Africa. Rates ex-Central & South America (CSA, -1%) and North America (-2%) origin points recorded small declines.

Region-to-region analysis

Examining the main intercontinental lanes, a number of markets saw rates rise, on a 2Wo2W basis, despite significant corresponding falls in tonnages. For example, Asia Pacific to Europe prices rose +9% despite a -4% drop in demand, while Asia Pacific to North America rates rose +5% despite a -6% fall in tonnages. Europe-Africa rates rose both northbound (+3%) and southbound (+5%), despite big falls in tonnages (-17% northbound and -15% southbound). Meanwhile, intra-Asia Pacific rates held firm (+1%) despite a significant fall in demand (-11%), related to the Eid holidays in parts of Asia.

For more details, please refer to the attached WorldACD weekly report.

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