BAROMETER. Worldwide air freight traffic totalled 23.1 billion tonne-kilometres in March 2024, 10% more than in March 2023. Freight rates are increasing.
The global air freight industry is confirming its recovery from one month to the next. March 2024 was the fourth consecutive month of double-digit growth. This performance is attributable particularly to the strong development of e-commerce. The air freight sector is also returning to a better balance between supply and demand. Capacity has been growing faster than traffic for several months but the trend is now reversing.
1/ Supply and demand
- Traffic in March 2024
According to data from the International Air Transport Association (IATA), traffic totalled 23.1 billion tonne-kilometres in March, 17.4% than in the previous month and 10.3% more than in March 2023. Corrected for seasonal variations, these increases were 0.2% and 11.4% respectively.
The growth came from the international routes, which showed year-on-year growth of 11.4%, "helped by the rapidly increasing demand for e-commerce services", according to IATA. All regions benefited from this growth to a greater or lesser degree.
* CTK: cargo tonnes-kilometres – Data source: IATA
- Traffic in Q1 2024
In the three months until the end of March, the volume of cargo transported totalled 63.6 billion tonne-kilometres, 13.2% more than in QI 2023 and 0.6% more than in Q1 2022. "Importantly," IATA noted, "for the first time, Q1 traffic surpassed the record heights experienced in Q1 2021, surpassing those by 0.4%." The first quarter of 2021 was part of a period of recovery after the disruption caused by the pandemic. Here again, a strong international performance drove growth in Q1 2024, when growth in this segment of the market alone totalled 14.3%.
* CTK: cargo tonne-kilometres – Data source: IATA
- Capacity
March 2024 was marked by a reversal of the trend of capacity growing faster than traffic for the first time for several months. Capacity totalled 48.9 billion tonne-kilometres, up 7.3% on March 2023. Corrected for seasonal variations, capacity contracted by 0.1% month on month but rose 7.6% year on year.
The annual growth in industry ACTKs (available cargo-tonne kilometres) for March was almost exclusively driven by belly-hold capacity, which recorded the 35th month of consecutive double-digit growth in March with 20.6% YoY (year on year), IATA said. On the other hand, capacity on all-freight aircraft rose only 1.2% year on year. The variation in month-on-month figures throws another light on this trend, however, since capacity on dedicated freight aircraft was 17.7% greater than in the previous month, while hold capacity on passenger aircraft increased only 8.9%.
In the 12 months up to the end of March, traffic also grew faster than demand. In the international segment alone, however, capacity increased a little more than demand. This trend was driven by the Asian and African airlines, which are still seeing capacity grow markedly more than demand, whereas, in all other regions, the reverse is true.
2/ Rates
The result of this reversal in the balance between capacity and cargo volumes in March was that the air freight industry registered a load factor of 47.3%, 2.2 points more than in the previous month and 1.3 points more than in March 2023. " Foremost," IATA noted, "this reading marked only the second positive annual ppt change in over two and a half years."
This change in the balance between supply and demand has been beneficial to carriers, causing freight rates to increase month on month on most major routes. This is illustrated by figures from Upply's database, which show a combination of contract and spot market rates. Over the 12 months until the end of March, however, freight rates were still down.
The increase in freight rates in March was particularly marked on the corridors between Europe and the east coast of North America and between Europe and Asia. On the former, the main factor is probably the dynamism of the American economy, since the accident in the port of Baltimore has had only moderate impact on container transport. Between Europe and Asia, there can be no doubt, however, that the disruption caused by Houthi rebel attacks on shipping in the Red Sea played a role.
Source: Upply Freight Index
Traffic trends on the major corridors confirmed these trends. The Middle East-Asia and Europe-Asia corridors showed 19.6% and 17% growth respectively year on year, although these totals were down one percentage point and up 2.7 points respectively on their February totals. Intra-Asia routes showed 11.8% growth year on year and 6.7% growth month on month. On a month-by-month basis, only the Intra-Asia and Europe-Asia routes showed improvement. _Growth on Asia-North America and North-America routes was much more moderate, showing year-on-year growth of 4.7% and 2.9% respectively.
3/ "Solid" perspectives
IATA is relatively confident about the outlook for the months to come, despite uncertainty about world trade and inflation trends. "With global cross-border trade and industrial production continuing to show a moderate upward trend, 2024 is shaping up to be a solid year for air cargo," according to IATA director general Willie Walsh. The two indicators he refers to increased by 1.2% and 1.6% in February. And in March, the purchasing managers' manufacturing output index stood at 51.9, which indicates that output is expanding. On the other hand, the new export orders index stayed under the 50 mark at 49.5, which means that export orders were still contracting.
Inflation meanwhile, remains volatile. In the EU and Japan, inflation was down to 2.6% and 2.7% respectively. In the United States, however, it rose to 3.5%. China, meanwhile, showed a slight deflation rate of 0.01% after a short period of inflation in February, which is not a good sign for the country's economy.
The air freight industry, therefore, had a good first quarter but remains at the mercy of an economic and geopolitical climate which is particularly fraught.
