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Air cargo rates climbed 36% year on year in May as conflict in the Middle ...
Latin American nations are opening their skies to the world.
Last month, the Peruvian government formalised an open skies deal with Australia, signed an agreement with its Spanish counterpart to remove all flight restrictions between the two nations and inked an MoU with Chile to double the flight limit between their respective capitals to 168 flights a week for each side.
Bent on making air travel more competitive, the government of Argentina is an eager proponent of open skies. Over the past year it has concluded a raft of deals with countries ranging from Latin American nations to Ethiopia, Turkey and Singapore.
However, these have borne little fruit so far, in terms of new routes, so the authorities have redoubled their efforts and worked on a number of reforms aiming to remove operational obstacles for would-be-market entrants, such as the restrictions pertaining to frequencies, destinations, and capacity.
The new year began with a fresh push, which aims to shift airport services from government agencies to airport operators. More steps may follow, prompted by complaints over limited choice in ramp handling, as well as the tax burden.
According to Peter Cerda, CEO of the Association of Transport for Latin America and the Caribbean (ALTA) and regional VP for the Americas of IATA, the regulatory changes should pave the way for progress on as many as 54 aviation bilaterals.
While these moves are driven by passenger considerations, cargo stands to benefit. Federico Calvo, director of Intermodal Logistics, said: “Any bill sent to Congress regarding aviation rulings will include ‘passenger and cargo’ wording, so changes to passenger flights will apply to cargo as well.”
Argentina’s passenger numbers set a new record in November, but cargo professionals are not impressed. Roberto Schiavone, chief commercial officer of Bringer Air Cargo, noted that perishable exports, the region’s primary outbound commodity, were largely moved on cargo charters to markets further afield.
One new entrant into Argentina is China Eastern Airlines, which launched twice-weekly passenger service in December, with B777-300ER aircraft from Shanghai to Buenos Aires with a tech stop in Auckland, setting a new record for the world’s longest commercial flight. Given the stage length, the ability to load cargo is severely constrained.
Airborne exports from Latin America rose 2.9% year on year in the 1-25 January period, data from World ACD show. Traffic to the Middle East and South Asia registered the strongest growth, followed by exports to Asia-Pacific.
Predictably, momentum picked up in the second half of the month, as flower exports for Valentine’s Day got into gear, which resulted in a 28% increase in outbound chargeable weight in the two weeks ending 25 January, compared with the previous two-week period. Volumes to North America jumped 30% during that window, sending rates 5% higher, World ACD noted.
On the water, the average rate for a 40ft container from Santos to New York dropped from $2,681 in mid-November to $1,340 in mid-December, and has since languished at that level, according to Freightos. The freight data portal’s latest numbers for container rates out of Buenos Aires to New York show a rise from $1,845 in September to $2,285 in November.
Schedule reliability of container carriers in the trade corridor slipped from October/November to November/December by 2.4%, but was still 23.7% higher than 12 months earlier, according to Sea-Intelligence. The average delay of late vessels increased by 0.97 days, to 4.24 days, which was 1.82 days shorter than the average measured by Sea-intelligence in November/December 2024.
Three of the box carriers operating between North and South America improved their performance, but the other six showed deterioration.
Washington’s gyrations in its trade policy have spurred efforts for new business relations. One of these repercussions has been a trade agreement between Mercosur and the EU, which had remained elusive for years.
Mr Schiavone thinks this will add fuel to a trend that has shown trade growing between these economic blocs, but he does not expect a significant impact in the short term.
“I see this in the mid-term. The agreement has to be validated by all the national congresses first; that will take some time,” he said.
In this episode of The Loadstar Podcast, host Charlotte Goldstone is joined by Sinan Ozcan, senior executive officer and director at DP World Trade Finance, to unpack how trade finance really works, and why it matters more than ever.
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