The global air cargo market experienced a remarkable +11% year-on-year growth for the third consecutive month in March, defying typical industry trends for the weaker months of the year. Buoyant e-commerce volumes and concerns over the Red Sea conflict disrupting ocean freight services contributed to the unexpected growth, providing a first-quarter bonus for forwarders and airlines, according to Xeneta’s latest market data.
This demand surge outpaced the +8% growth in capacity supply, resulting in a +2% points increase in the global dynamic load factor to 59% in the first quarter of 2024, rising to 61% in March.
Niall van de Wouw, Xeneta’s Chief Airfreight Officer, noted the surprising resilience of the airfreight market, driven primarily by increased volumes from the Middle East and South Asia due to the shift from ocean to air freight to avoid Red Sea delays. E-commerce growth also played a significant role in driving demand.
The average global airfreight spot rate in March increased +7% from the previous month to USD 2.43 per kg, with corridors like the Middle East and South Asia to Europe experiencing significant rate jumps.
However, the South America outbound market witnessed declines in air cargo rates as floral market demand eased.
Despite expectations of a market slowdown, freight forwarders continued to purchase a larger share of volumes on the spot market in the first quarter of 2024, with more shippers pivoting towards short-term capacity commitments.
While anticipating downward pressure on load factors and rates in the coming quarters, the air cargo market has shown remarkable resilience, enjoying six months of stronger-than-expected performance.