Air Cargo Market Continues to Remain Bleak
It’s been a tough year for the air cargo market as it continues to remain bleak through this year.
Some are even taking a ‘wait and see’ approach before making long-term air cargo capacity commitments.
This comes after airlines have seen demand drop two percent month-over-month in November, with general air cargo market demand falling for a ninth consecutive month – eliminating hopes that a late peak season boost could occur.
October Regional Performance, Uncertainty Lingers
At the end of November, the International Air Transport Association (IATA) released data that detailed global October 2022 regional performance.
Some brief notes:
- North American carriers saw an 8.6 percent decrease in cargo volumes that month this year, compared to October 2022.
- European carriers saw an 18.8 percent decrease in cargo volumes in October this year, compared to the same month last year.
- Latin American carriers saw a decrease in demand of 1.4 percent in cargo volumes in October, compared to the same month last year.
- Middle Eastern carriers saw a 15 percent year-on-year decrease in cargo volumes in October 2022.
Additionally, compared to last year in November, air cargo rates and demand out of Asia posted record-high numbers, unfortunately a miracle would have to happen during the remainder of this year’s air freight peak season (that really hasn’t happened), to even come close to last year.
As we can remember, throughout the pandemic many cargo and passenger airlines captured a lot of freight business while some ocean carriers and ports were overwhelmed by supply chain bottlenecks.
And while shipping goods via air will get your shipments to you quicker, it is typically more expensive than shipping via ocean.
Now, many shippers are moving towards ocean freight again, with demand decreasing and shipping rates falling.
It’s hard to predict what is going to happen in the air cargo market as we enter 2023 here soon. Some experts feel like it’s rather unlikely that general airfreight will see an increase in 2023 as shippers are feeling more comfortable about the reliability of ocean freight – at least for the foreseeable future.
Should you have any questions regarding this and how it could impact your shipments, please reach out to our team today. Additionally, we have our weekly market updates that can provide you with relevant freight news, updates, developments across the industry, and more.