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Global air cargo demand surges 11% in March despite Red Sea disruptions

image credit: qatar airways

According to the latest data from Xeneta, the global air cargo market witnessed an unexpected surge in demand, rising by 11% year-on-year for the third consecutive month in March.

This growth, fueled by buoyant e-commerce volumes and concerns over disruptions in the Red Sea region affecting ocean freight services, has delivered an unexpected first-quarter bonus for forwarders and airlines.

Despite typically being weaker months for the airfreight industry, the higher volumes in Q1 outpaced the growth in capacity supply, resulting in a notable increase in the global dynamic load factor. This measurement, which considers cargo capacity utilization based on volume and weight, rose by 2% points year-on-year to 59% in the opening three months of 2024, reaching 61% in March.

Niall van de Wouw, Xeneta’s Chief Airfreight Officer, commented on the surprising activity in the airfreight market, attributing it to increased volumes from the Middle East and South Asia, as well as the ongoing growth in e-commerce.

In March, the average global airfreight spot rate increased by 7% from the previous month, reaching USD 2.43 per kg. Particularly, the Middle East and South Asia to Europe market witnessed a significant jump in air cargo rates, with a 46% increase over February’s levels, reaching USD 2.82 per kg.

Conversely, the India West Coast to North Europe ocean containerized spot rate experienced a 9% decline in March, although still significantly above pre-Red Sea disturbance levels.

The Middle East and South Asia to US air cargo market also saw notable growth, with a 35% month-on-month increase in spot rates to USD 4.03 per kg in March.

Meanwhile, the China outbound market experienced fluctuations, with spot rates decreasing slightly in March due to market cooling after the Lunar New Year festivities. However, year-on-year, there was still growth in rates driven by e-commerce demand and a modal shift away from the Red Sea.

The South America outbound market faced challenges, with decreases in both the South America to US and Europe air cargo spot rates in March due to easing floral market demand.