News / Q4 air cargo surge expected, but e-commerce will dominate capacity

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A busy Q3 for airfreight has heightened expectations that a Q4 surge will be stronger than anticipated, with freight rates and surcharges to match.

Lufthansa Cargo told The Loadstar in mid-August: “This time of the year is normally considered a low-season period. Despite that, this year we are witnessing higher rate levels compared with the historical average. 

“It’s a typical supply and demand situation, partly driven by geopolitical factors that directly and indirectly contribute to this price increase,” the German carrier explained. 

Indeed, Xeneta’s Chief Airfreight Officer, Niall van de Wouw said: “Typically, air cargo market performance in August tends to follow the July trend. But another month of double-digit demand growth and the strongest rate growths of the year means there was definitely no summer slack season in 2024.”

And leading from a busier-than-expected Q3, Mr de Wouw, told The Loadstar Podcast: “There are many signals that will see a very busy Q4. 

“If you look at the typical seasonality patterns in e-commerce, it really grows a lot in Q4 relative to Q3,” he explained, and said that export flights from Asia could already be some 84%-88% full.  

He noted that Chinese e-commerce behemoth Temu had its app downloaded 37 million times in July: “[That’s] 37 million consumers to potentially buy stuff on that platform”. 

And Mr van de Wouw added: “So, there is not a lot of capacity freely available, let alone if the surge comes,” highlighting that e-commerce has had a bigger impact on air cargo demand than the ocean-to-air shift caused by the Red Sea situation. 

Lufthansa Cargo added: “In the next few months we would be entering the usual peak season, when overall market rates in the freight industry have historically always been high.” 

Indeed, Loadstar Podcast host Mike King noted that FedEx and UPS peak season surcharges “have indicated that the forwarders are expecting strong international and US domestic demand in Q4”. 

But Mr van de Wouw pointed out that this would “vary a lot”, depending on the tradelane.  

“You could see rates doubling or tripling from India or Bangladesh, but you could also see rates being 20%-30% less than last year on other lanes – by no means is the global average a ‘yardstick’ for individual lanes… Out-o-Asia is where we see the biggest increase,” he explained.  

According to the latest Xeneta data, the global average air cargo spot rates in August were $2.68 per kg, “boosted by continuing supply and demand imbalance”.  Global cargo demand continued its double-digit growth, rising 11%.

“Now we’re at the threshold of Q4, it will be interesting to see what will happen and if all the anticipation of a red hot peak season materialises… September will be a good indicator of what Q4 will bring.

“I said to a shipper last week if you are not already a little bit nervous, I would recommend you get a little bit nervous for Q4 when you look at all the signals out there,” Mr van de Wouw concluded.

You can listen to the whole Loadstar Podcast here