News / Alright for some as the air cargo market ends first quarter with a shudder

15/04/2020

Forwarders are experiencing very divergent air freight businesses, according to new data from World ACD.

While the top 10 air freight forwarders saw volumes grow 3% on average between March and February, it was in fact a mixed bag, with one losing 9% and another gaining 16%.

Forwarders ranking between 11^th and 20^th place, lost 2% as a group, but individually, one lost 40% of volumes while another gained 117%.

Unsurprisingly, the larger forwarders benefited from their ability to source capacity.

Meanwhile, the first week of March may have been the best week of the year for air cargo, but the month saw an overall year-on-year drop in chargeable weight of 17.7%, according to World ACD.

Africa and MESA were hardest hit, down 28% and 32% respectively, while Asia Pacific fell 12% and the Americas dropped 17%. Freighter capacity went up, by 2%, but failed to offset the 39% drop in bellyhold capacity.

Yields tell a better story for airlines, with Asia Pacific seeing yields in dollars, rise year on year by a third, while from China it was up two-thirds to an average of $3.58 per kg. Revenues from China to Asia Pacific jumped a significant 91%.

Month to month tells a different story, with freighter capacity rising 29% between February and March. Freighter airlines carried 42% more cargo in March than the previous month, giving them 81% revenue growth; passenger airlines saw a cargo fall of 22%.

March was a game of two halves, noted World ACD.

“Freight capacity fell by 28% in two weeks. Cargo carried on freighters was 3.5% higher in the second half than in the first, but freight carried on passenger aircraft halved, causing total freight carried to drop by 22% from H1 to H2. Cargo carried from Africa and MESA fell by more than 30% in two weeks, Asia Pacific’s by less than 10%.”

World ACD added: “Cargo carried in the last week [of March] was 31% lower worldwide than in the first week. Airlines from the Middle East were hardest hit with a volume decrease of 49%. Cargo capacity on passenger aircraft virtually disappeared in the MESA region (-92%). Asia Pacific airlines dropped least (-10%). Airlines from North America lost 53% in European markets, but airlines from Europe only 28% in North American markets.”

On the pricing side, FIS has reported the weekly TAC Index figures.

“Hong Kong to Europe sees a sudden drop-off in rates, down 45 cents to $4.66, however this move has not been significant to dampen a 44 cent climb in China to Europe, now at $6.66.

“Shanghai to Europe continues to surge, up a further $1.32 to $8.65. Last physical offer seen for $8.88 for scheduled flights next week.

“China to US appears to bounce, up 40 cents, however retaining single-digit growth percentages. Again, this is largely on the back of a surging Shanghai export price, up 57 cents.

“As a result, the front month offers have been lifted to $6.45 and $6.04 respectively, lifting the rest of the Q2 prices through to June.”