Global air cargo demand grew in August with volumes increasing 6% year-on-year. Shippers have to contend with higher freight rates seeing that air cargo demand shows marked resilience.
Global air cargo spot rates in August were at an average $3.13 per kg which is 24% higher year-on-year. Even though the rate of growth has eased over three consecutive months, spot rates have remained high.
Shippers want to push rates even lower just to enjoy some reprieve. On the other hand, airlines will hope the rates can hold at current levels at least until the busier months arrive.
Shippers are focused on buying more capacity on the short-term market buying time to see if the downward pressure on spot rates delivers budgetary relief. Growth of demand against supply and rising jet fuel prices mean that the decrease will come in small steps.
Falling ecommerce exports after removal of EU’s €150 duty-free threshold for low value goods on 1 July is attributed to the dropping rates. The reaction is expected to be short-lived with China’s ecommerce exports expected to recover.
Air cargo spot rates have taken divergent paths across different corridors. Corridor-level rates are determined by supply and demand rather than fuel prices.
