Indicating a new baseline for the cargo market
Global air cargo capacity increased for the eleventh consecutive month in February, up 11% on the same period last year. The global average air freight spot rate of USD 2.73 per kg declined -35% year-on-year but remained +52% ahead of the pre-Covid level seen in 2019 according to data released by CLIVE Data Services, part of Xeneta. Global air cargo volumes fell -4% year-on-year in February as available cargo capacity rose above the pre-pandemic level for the first time in four years.
Niall van de Wouw, Chief Airfreight Officer at Xeneta, said the latest data means it’s time for the industry to let go of pre-Covid comparisons and to acknowledge a new baseline for air cargo market growth. “CLIVE Data Services was one of the first industry analysts to benchmark data versus the pre-pandemic level because a comparison was needed at the time to accurately measure air cargo’s performance. But the fascination and rhetoric around air freight rates going back to the 2019 level needs to be replaced based on the inflationary components we now see.”
“We again had significantly more capacity in the market due to the growth in long-haul passenger traffic.”
Dorothea von Boxberg, CEO Lufthansa Cargo
For the key operators, Lufthansa Cargo has come out on top and achieved record results for the third time in a row. The cargo division reported a record EUR€1.6bn EBIT boosted by cargo yields that were 132% above pre-crisis levels due to reduced industry capacity. “In the past fiscal year, we achieved a record result for the third time in a row. We owe this to the high level of commitment of our employees and the trust of our customers and partners. In addition, we again had significantly more capacity in the market due to the growth in long-haul passenger traffic. We notice that our customers continue to serve their global supply chains. With more freighters and more bellies, we will continue to be a strong and reliable partner for our customers,” said Dorothea von Boxberg, Chairperson of the Executive Board and CEO of Lufthansa Cargo.”
Meanwhile, in the Asia Pacific region, the Association of Asia Pacific Airlines (AAPA) reports that air cargo volumes came under pressure due to multiple headwinds. Higher inflation levels across various economies and the persistently strong US Dollar have added to the price pressures for imported commodities and merchandise in local currency terms. On the Europe to North America corridor, February’s average spot air freight rate was USD 2.88 per kg, a fall of -6% from last month’s level and -40% from a year ago but remained up 42% on the pre-pandemic level.
“The stabilising market is creating a new baseline. It is time to let go of pre-Covid comparisons,” van de Wouw noted.
