2024 could mark the start of a new economic growth cycle for the global air cargo industry after last year ended with demand up +9% year-on-year and the general air cargo spot rate hitting a nine-month high, suggests the latest weekly market data analysis by Xeneta.

While the geopolitical environment and cost of living pressures continue to pose significant barriers to global trade, the predictability of air freight means the industry stands to benefit from escalating international disruptions, even if it produces only modest gains in volume.

Niall van de Wouw, Chief Airfreight Officer at Xeneta, said: “To call 2024 a ‘new dawn’ is perhaps a little too optimistic, but I certainly think it’s the start of a new cycle for airlines and freight forwarders – and shippers will also likely welcome the return of stability to the market so they can more accurately predict the costs of transporting the products they sell.”

In 2023, average global air freight tonnages are 5% lower than the previous year

Weekly market data for December shows that the global average spot air freight rate peaked at US$2,60 per kg, up +6% from its November level, driven by annual demand growth of +9%.

The general air freight spot rate, however, continued to record a double-digit decline of -18% year-on-year. This compares to a growth ratio of -25% in November compared to the previous year.

Wouv said: “The December 2023 data shows that the market was slightly busier than expected, but we shouldn’t be tempted to draw too many conclusions from what happens in the last month of the year as the Christmas and New Year holidays make it a strange month.

“We must also take into account that December 2022 provided a weak basis for comparison given the very subdued demand seen 12 months ago.

"These latest data appear to reflect a stronger but temporary performance of the local market on key routes, rather than signaling a much better performing global economy.

“Our market forecasts for 2024 remain unchanged with an anticipated growth of +1 to 2% in demand and an increase of +2 to 4% in supply.”

As rising living costs spread to advanced economies, consumers have opted for cheaper online shopping to fill their Christmas shopping lists, boosting export volumes, particularly from Asia.

However, it should be noted that general retail sales outside of e-commerce remained subdued, especially when adjusting for inflation.

Regarding market supply, global air freight capacity in December remained at a similar level to previous months, increasing by +6% year-on-year compared to global supply still recovering in 2022.

The global dynamic load factor, Xeneta's market performance indicator that measures air cargo capacity utilization by considering both cargo volume and weight carried and available capacity, fell to 59% in December.

This is down 1 percentage point from its November level, but up 3 percentage points from December 2022, as year-on-year demand growth outpaced the increase in freight capacity.

TLME