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Cathay Pacific suffered a large decline in cargo volumes last month, but there are signs of an uptick for airfreight this month.
The Hong Kong-based carrier said it carried 103,092 tonnes of cargo in November, a 23.8% decline year on year and 42.1% lower than the same period in 2019. January-November volumes were down 12.6% year on year, Cathay added.
Chief commercial officer Ronald Lam said: “Demand remained flat compared with the previous month, despite it being the start of the traditional peak cargo period. Production activities in the Chinese mainland and trade flows remained constrained.
“While we did witness a mild uptick in e-commerce movements into the Americas around the Black Friday shopping period, a similar surge on regional lanes was more short-lived.
“Conversely, movements of perishables from South America, Australia and New Zealand were relatively active. We operated five non-scheduled services from Darwin, Australia, carrying fresh seasonal produce into North Asia to capitalise on this activity.”
As passenger demand continued to improve, Mr Lam said Cathay was further increasing its passenger flight capacity, which would provide “cargo customers with more destinations and greater frequencies to choose from”.
He added: “However, we expect headwinds in the air cargo market to continue in the short term, until supply chains on the Chinese mainland become more stable and inventory levels in key consumer markets reduce.”
But today’s TAC Index report says: “Following a modest bounce the previous week, air freight prices have dropped again.”
Nevertheless, forwarders have reported signs of a much-needed uptick this month. For example, Flexport said: “Transpacific eastbound demand is on the rise, and that trend is expected to continue through the Christmas holiday. Rates have also increased, compared with the week prior. Far East westbound demand and rates remain stable.”
In South China, the forwarder said, the market was “picking up and space is starting to become congested”.
Flexport added: “The Chinese government recently announced an easing of Covid restrictions, so cross-border traffic is expected to gradually resume.”
Indeed, despite the short-term uptick in demand, China reopening could bring large amounts of belly capacity back to the market next year and further drive down freight rates, some forwarders have suggested.
The TAC Index notes: “Signs of an end to the zero-Covid regime in China are not reflected yet in rising prices from there … other routes from Asia, such as from India and Vietnam, which are dominated by more spot market business, fell even more steeply.”