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WorldACD Weekly Air Cargo Trends – week 17

Tonnage surge continues from Central & South America

Air cargo tonnages from Central & South America (CSA) continued to surge in the final full week of April, as flower growers, retailers and their logistics providers ship in flowers ahead of upcoming Mother’s Day events in May in North America and other parts of the world, while air cargo has also returned to growth from most of the other main world regions.

According to the latest weekly figures and analysis from WorldACD Market Data, total worldwide tonnages rose by a further +5% in week 17 (22-28 April), after gaining +4% in week 16, more or less wiping out the week-on-week (WoW) declines of -2%, -4% and -6% in the previous three weeks caused by a combination of the effects of various holiday periods such as Easter and Eid. Average worldwide rates dropped back slightly (-1%) to US$2.47 per kilo in week 17, also taking them back fractionally below their level in the equivalent week last year (US$2.52), based on the more than 450,000 weekly transactions covered by WorldACD’s data. But the current rates remain significantly above pre-Covid levels: +37% compared to April 2019.

Flower boom

Fresh analysis by WorldACD reveals that total outbound tonnages from CSA rose, WoW, by a further +23% in week 17, following on from a rise of +14% in week 16, with the combined tonnages in weeks 16 and 17 recording +30% growth, compared with the previous two weeks (a 2Wo2W comparison), chiefly to destinations in North America. Indeed, CSA to North America tonnages were up by +48%, on a 2Wo2W basis, ahead of Mother’s Day in the USA and Canada on 12 May. As highlighted last week, although around 90 countries or territories around the world celebrate Mother’s Day on the second Sunday in May, North America is by far the most important destination market for flowers shipped by air from CSA.

That surge in export traffic from CSA helped drive total worldwide tonnages back into positive territory (+5%), on a 2Wo2W basis, with export tonnages from Africa (+8%), Europe (+8%), and Asia Pacific (+3%) also seeing a meaningful 2Wo2W growth. Analysis by WorldACD indicates that the current flower export spike from CSA accounted for around 30% of the worldwide growth recorded in week 17.

Compared with last year, total worldwide tonnages in weeks 16 and 17 were up by +9%, driven by YoY growth of a +15% from Asia Pacific origins, +11% from Middle East & South Asia (MESA) origins, +10% ex-Africa, and +8% from CSA, with more-modest YoY rises from Europe (+5%) and North America (+3%), as all the main world origin regions recorded YoY growth. For the full month of April, total worldwide tonnages were up by +9% compared with last year, preliminary figures show. This increase is slightly lower than in Q1 (+11%).

Pricing patterns

Meanwhile, on the pricing side, the spike in CSA to North America tonnages was also accompanied by a +12% rise in rates, 2Wo2W – the only significant rates rise among any of the main intercontinental lanes measured by WorldACD’s data. And that drove up total air export rates from CSA by +6%, the only origin region to record an overall rise in average rates.

But YoY, the two big pricing stories are the big Asia Pacific outbound market, where average outbound rates are up +7%, YoY, and MESA – where, despite a relative slowdown in mid-April due to the Eid holiday period, rates are up by +42%, YoY, linked to strong demand developments combined with supply issues caused by disruptions to container shipping.

New analysis by WorldACD this week reveals that average rates from MESA origin points to Europe have been more than double their equivalent levels last year in each of the last four weeks. That’s been particularly driven by prices from India and Bangladesh to Europe, which remain up, YoY, in week 17 by +165% and +178%, respectively – to $3.97 a kilo and $4.60 a kilo.

Post-Eid recovery

As WorldACD has highlighted in recent months, 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. Dubai-Europe tonnages have been particularly strong, up by more than +100%, YoY, since week 7.

Although Dubai-Europe tonnages softened slightly in weeks 15 and 16, due to the Eid holidays and flood-related impacts on air services in Dubai, demand bounced back extremely strongly in week 17, with tonnages up by a staggering +255%, YoY – albeit against a slightly soft comparison week last year. Nevertheless, although there are some suggestions that shippers are adapting to longer container shipping transit times from Asia to Europe, and average container vessel reliability is returning towards pre-crisis levels, there are no signs yet of the current highly elevated Dubai-Europe air cargo traffic levels waning.

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

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