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WorldACD Weekly Air Cargo Trends – week 18

Tonnages dip due to Labour Day holidays

Worldwide air cargo tonnages dipped in the week commencing 29 April, chiefly due to Labour Day holidays and Japan’s Golden Week, while demand and rates remain highly elevated from Middle East & South Asia (MESA) origins to Europe, and average global rates increased slightly.

According to the latest weekly figures and analysis from WorldACD Market Data, total worldwide tonnages dropped by -12% in week 18 (29 April to 5 May), after bouncing back in the previous two weeks from the effects of Easter and Eid holidays. Tonnages fell in week 18 from all the main global regions, but most significantly from the big Asia Pacific origin region, where volumes were down nearly -16%, week on week (WoW).

Roughly one third of that Asia Pacific decline can be attributed to Japan’s Golden Week holiday from 29 April to 5 May, which led to a WoW decline of -46% in chargeable weight from Japan origins, based on the more than 450,000 weekly transactions covered by WorldACD’s data. Meanwhile, after booming for two consecutive weeks, buoyed by flower shipments ahead of Mother’s Day, tonnages from Central & South America (CSA) declined, WoW, by -14%, of which more than half (54%) can be attributed to the post-peak drop in the flower business. Tonnages ex-Europe fell, WoW, by around -11%, with smaller declines from MESA (-5%), Africa (-5%) and North America (-4%).

Removing the effects of Japan’s Golden Week and the decline in flower shipments ex-CSA would reduce the global tonnage decline in week 18 from -12% to -9%. In week 18 last year, tonnages fell by a similar amount (-10%).

Further analysis confirms that a large part the WoW decline in week 18 was linked to public holidays around Labour Day on 1 May, which especially impacted Europe, CSA, parts of Asia (e.g. China, Vietnam, Malaysia, Singapore, Thailand) and Africa (e.g. South Africa). For instance, most (84%) of Europe’s overall WoW decline of -11% was contributed by countries in which 1 May (Labour Day) is a public holiday. And when looking globally, at least two thirds of the WoW decline is from countries that celebrate Labour Day.

2Wo2W comparisons

Despite the declines in tonnages in week 18, expanding the comparison period to two weeks points to a more stable picture, and a demand environment that is significantly stronger than the equivalent period last year. For example, the combined global tonnages of weeks 17 and 18 are slightly up (+1%) compared with the previous two weeks (a 2Wo2W comparison), and are up +12%, year on year (YoY). MESA (+26%), Asia Pacific (+19%), and Africa (+12%) all recorded very significant YoY gains in chargeable weight, with Europe (+7%) and North America (+4%) also up, YoY.

On the pricing side, average global rates rose slightly (+1%) in week 18 to US$2.51 a kilo, which is around +2% higher than the same week last year and significantly above pre-Covid levels (+42% compared to May 2019). And on a two-week combined basis, the combined rates levels in weeks 17 and 18 were stable, on both a 2Wo2W and YoY basis, with CSA the only region to record a significant 2Wo2W rise in rates.

On a YoY basis, rates from origin region MESA remain highly elevated (+40%) compared with this time last year, linked to strong demand developments combined with supply issues caused by disruptions to container shipping, and rates from Asia Pacific origin points remain significantly up (+9%), YoY. But average rates from Europe (-21%) and North America (-15%), are well below last year’s levels.

MESA-Europe surge continues

Despite the overall drop in tonnages in week 18 from all the main world regions, including from MESA origins, fresh analysis this week by WorldACD reveals that air cargo tonnages and rates from MESA origin points to Europe remain highly elevated. Tonnages from MESA to Europe as a whole were up, year on year, by +40% in week 18 and very similar to those of the previous week. Dubai-Europe tonnages continue to boom, at almost three times their level in week 18 last year (+183%), boosted by sea-air traffic via this key hub.

Demand from India to Europe appears to have eased slightly in the last four weeks from the extraordinarily high levels seen in weeks 8 to 14. Whereas tonnages in March and late February were regularly up, YoY, by between +30% and +60%, the YoY gains in weeks 15 to 18 range between +4% and +13%, with tonnages down by almost a quarter compared with their levels in week 8.

However, on the pricing side, average rates from India ($3.94 per kilo, +164%) to Europe are still exceptionally high. Meanwhile, rates from Dubai and Colombo to Europe are up, YoY, by a more modest but still remarkable +44% and +51%, respectively, as strong demand and the disruptions to container shipping in the region caused by the attacks on ships in the Red Sea continue to stimulate very strong air cargo demand from the MESA region.

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

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