Demand for global airfreight saw a resurgence in July, with rates rising across the board, leading to anticipation for a significant peak season in late August.
Xeneta reported that rates had increased by 20% year-on-year (y-o-y) in July, with average spot rates at $2.66 per kilogram, driven by a 13% rise in volumes.
According to the market analytics platform, this surge was attributed to robust e-commerce activity and the relatively low demand base of July 2023.
Niall van de Wouw, chief airfreight officer at Xeneta, noted that the air cargo sector showed resilience despite potential disruptions from an IT outage in July.
He suggested that airlines might be optimistic about sustained favourable conditions as they approach the peak season.
Regionally, the Middle East-Europe and Central Asia-Europe routes performed exceptionally well, with spot rates in the last week of July increasing by 126% compared to the previous week, reaching $3.16/kg.
This rise was influenced by disruptions in the Red Sea and unrest in Bangladesh.
A forwarder based in Chennai indicated that while demand from South Asia had remained stable, they anticipated a surge in demand for space on services from India to the US and Europe.
Carriers were reportedly increasing rates in anticipation of this demand spike.
The forwarder also mentioned that disruptions in the Red Sea had led to a shift from ocean freight to airfreight for cargo bound for the US west coast.
The Baltic Air Freight Index for the week ending July 29 showed that rates for services from India to Europe and the US had increased.
Cargo data platform WorldACD reported significant y-on-y increases in Europe-bound rates from Bangladesh (up 178% to $4.59/kg), India (up 161% to $3.54/kg), and Sri Lanka (up 78% to $3.20/kg).
Xeneta’s July report highlighted that spot rates from south-east Asia to Europe and North America had more than doubled compared to the previous year, at $3.85 and $5.78/kg, respectively.
However, on the north-east Asia to Europe and North America routes, there was a more modest 30% y-on-y increase in average spot rates, reaching $4.17 and $4.39/kg, respectively.
Van de Wouw commented that all eyes were now on late August for the first signs of a substantial peak season, which would be a significant boon for airlines after an unexpectedly strong first seven months of the year.
