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Airfreight Soars with E-commerce Surge: Unexpected Growth in 2024

Airfreight Soars with E-commerce Surge: Unexpected Growth in 2024


As we move through 2024, the air cargo market has shown unexpected resilience, defying predictions of a summer slowdown. Instead, global airfreight volumes have maintained momentum, driven by Asian exporters turning to air transport due to delays in ocean shipping around the Red Sea conflict zone and a surge in orders from Chinese e-commerce platforms destined for Europe and North America.

Surprising Trends in Air Cargo

Air cargo demand saw an 11% year-over-year increase in April, marking the fourth consecutive month of growth, according to Xeneta. Data from the International Air Transport Association (IATA) also supports this trend, with volumes growing by 10.3% in March and 13% in the first quarter. This growth streak has continued into early May, with volumes rising by 12% to 16%, as reported by WorldACD and Xeneta.

Regional Shifts and New Markets

While demand has slightly decreased in the Indian subcontinent and Southeast Asia due to more predictable ocean shipping schedules, air cargo volumes remain historically significant. Seasonal fluctuations, like the brief dip during the Muslim Eid holiday and disruptions at Dubai airport, were countered by a surge in flower shipments from Central and South America. For example, Latam Airlines reported moving over 24,000 tons of flowers in the three weeks leading up to Mother’s Day, a 20% increase from the previous year.

Financial Indicators and Market Responses

First-quarter cargo revenues for airlines, although still declining, showed a narrower year-over-year decrease compared to 2023. Air France-KLM, for instance, reported a 16.5% decline in cargo revenues, an improvement from the 23% drop in the fourth quarter of last year.

Cargo spot rates have stabilized, with global airfreight rates rising 5% year-over-year to about $2.50 per kilogram. The China-North America spot rate saw a significant increase, reaching $5.86 per kilogram in May, up from $1.80 the previous year. Meanwhile, cargo capacity has grown by 5% year-over-year as more passenger airlines resume operations, slightly reducing load efficiency.

Nontraditional Demand Sources

Xeneta's April report highlighted that the spillover demand from elongated ocean routes to Europe is easing as businesses adjust their lead times. However, air and sea-air alternatives remain attractive, especially as ocean carriers face capacity shortages and route disruptions.

The increased demand in Europe, coupled with vessel bunching at Asian hub ports, has led to a significant rise in ocean freight rates. For instance, shipping prices from Shanghai to Rotterdam surged by 20% week-over-week in mid-May, according to Drewry’s World Container Index.

E-commerce and Air Cargo Synergy

E-commerce continues to dominate the air logistics sector, particularly for shipments out of China. Major e-commerce platforms like Shein, Temu, and AliExpress maintain high volumes year-round, influencing air cargo demand significantly. Business-to-consumer shipping now represents 50% of all air volume leaving China, with a notable percentage of exports from Hong Kong and Shanghai consisting of small parcels.

Macroeconomic Outlook

Despite mixed economic signals, the overall outlook for air cargo remains positive. The global manufacturing sector has shown slight expansion, and new export orders are nearing growth thresholds. The World Trade Organization predicts a 2.6% increase in global goods trade for 2024, following a 1.2% decline in 2023.

European companies are restocking after cautious ordering last year, further boosting demand. However, inflationary pressures and potential recession risks in the United States and other regions could impact future growth.

The airfreight sector’s unexpected growth in 2024, fueled by e-commerce and strategic shifts from ocean to air transport, underscores the dynamic nature of global logistics. While challenges remain, the sector's adaptability and the sustained demand from nontraditional sources like e-commerce provide a robust foundation for continued resilience and growth in the months ahead.

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