Air Freight Market Update
November 2024
The global air cargo sector is experiencing solid growth driven by e-commerce and holiday shopping, but faces capacity constraints due to reduced belly cargo capacity and a limited supply of widebody freighters, particularly on key trade routes. Geopolitical conflicts and new security regulations are disrupting operations, with significant regional impacts such as rising Transatlantic rates in Europe, double-digit demand growth in Asia, e-commerce-fueled import demand in the Middle East and Africa, and severe congestion in the Americas.
Global Air Cargo Update
E-commerce and holiday shopping surge drive global air cargo demand
- Global air cargo sector witnesses a solid growth increase driven by the holiday shopping season and increased consumer spending.
- E-commerce continues to be a major driver of air cargo demand, particularly for high-value and time-sensitive goods.
Air cargo faces tight capacity amid high demand and limited freighters
- Air cargo industry faces capacity constraints due to reduced belly cargo capacity on passenger flights and a limited supply of widebody freighters.
- High demand is outpacing available air cargo capacity, particularly on key trade routes.
Geopolitical conflicts and new regulations disrupt global air cargo operations
- New security regulations in the US and CA drive operational challenges and higher rates due to pre-screening and compliance demands.
- Air cargo capacity at GRU airport stabilizes for imports, while exports remain constrained.
- Flight cancellations from/to Lebanon by most airlines due to ongoing Middle East conflict, leading to industry backlogs.
- Conflicts in Ukraine and the Middle East persist, expected to disrupt trade routes and modalities into late 2024.
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Regional Air Freight News
Europe: Transatlantic rates rise amid capacity cuts in both freighter and belly capacity
- Manufacturing output in Europe continued to decline, driven by a drop in factory orders in larger markets (e.g., DE, IT, FE, NL), while smaller markets (e.g., ES, IE, GR) show continued resilience.
- Significant Transatlantic rate surge driven by reductions in both freighter and belly capacity with the onset of the winter season.
- European imports from the Middle East continue to rise amid Red Sea disruptions and strong sea/air volumes
Asia: Air cargo demand set for double-digit growth driven by key lanes
- Buoyant market demand sees robust performance on key lanes, particularly between North Asia and Europe.
- Cargo rush to avoid US tariffs on all imports has yet to materialize.
- Airfreight demand set for double-digit growth in 2024 as elevated rates persist amid tight capacity.
Middle East and Africa: E-commerce growth fuels import demand despite capacity challenges
- Import demand into MEA region set to rise by over 8% in 2024, driven by e-commerce growth in U.A.E. and Saudi Arabia,
- U.A.E. capacity growth fueled by increased freighter traffic at DWC to meet rising export demand into Europe.
- Situation at BEY airport remains challenging due to reduced capacity by decreasing flight frequencies.
Americas: Supply chain disruptions drive capacity constraints across the region
- Severe congestion at Brazil’s GRU airport threatens air cargo operations amid labor shortage and slow processing.
- US experiences capacity constraints due to South America congestion, with EU-AMLA cargo rerouted via US gateways driving rate increases.
- Canada port strike in Montreal and Vancouver continues, driving slight increase in air freight demand.
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