Global tonnage increase in January much lower than last year
Worldwide air cargo recorded a +2% year-on-year (YoY) tonnage increase in January, well below the +11% average growth last year, facing tougher comparison figures, moderating e-commerce volumes, and an earlier-than-last-year slowdown ahead of Lunar New Year (LNY) holidays in East Asia.
According to the latest weekly figures and analysis by WorldACD Market Data, total worldwide tonnages dropped by -12% in week 5 (27 January to 2 February), week on week (WoW), after rebounding in the previous three weeks from air cargo’s normal, seasonal end-of-year slump.
That -12% WoW drop was entirely due to a -33% decline in chargeable weight flown from Asia Pacific origins because of the annual two-week closure of most factories in China and some other East Asian countries due to LNY. LNY this year took place on 29 January, whereas last year it was on 10 February, adding complexity to YoY comparisons with January 2024.
The -33% WoW drop in tonnages from Asia Pacific in week 5 was partially offset by WoW increases from Central & South America (CSA, +16%) and Africa (+11%) – boosted by higher flower volumes ahead of Valentine’s Day on 14 February – and a +4% increase from North America origins. Nevertheless, total worldwide tonnages in week 5 were down by -14% compared with the same week last year, based on the more than 500,000 weekly transactions covered by WorldACD’s data. Alongside a -29% YoY drop from Asia-Pacific origins, there were also YoY falls from Europe (-7%), Middle East & South Asia (MESA, -5%), and North America (-1%).
January full-month picture
On a full-month basis, tonnages in January from Asia Pacific origins were still up, YoY, by +3%, despite part of the big LNY-linked drop in demand this year happening in late January, rather than falling in February, as last year. There were also YoY tonnage increases in January from North America (+5%) and CSA (+2%) origins. Worldwide tonnages were up by +2%, YoY.
Overall full-market average global rates for January of US$2.44 per kilo were up, YoY, by +7%, thanks to year-on-year increases from MESA (+33%), Asia Pacific (+10%) and Africa (+10%) origin markets, with average worldwide spot rates of $2.67 per kilo standing +17% up on last January’s levels, while contract rates were up just +2%, YoY, to $2.39 per kilo.
Average prices dip due to Asia Pacific tonnage drop
Based on a full-market mix of spot rates and contract rates, average worldwide air cargo prices in week 5 fell back by around -2% to $2.42. Prices from each of the world’s main origin regions actually rose, WoW, with the overall average decline resulting from the big drop in tonnages flown from Asia Pacific origins, reducing the proportion of cargo from those higher-yield origin markets. Average worldwide rates stand +5% above their already high levels this time last year, driven by YoY increases from MESA (+33%), Asia Pacific (+11%) and Africa (+12%).
The patterns for spot rates are similar, with average worldwide spot rates in week 5 flat, WoW, at $2.65. Despite the big drop in tonnages from Asia Pacific origins, spot rates from that region rose, WoW, by +3% to $3.87 per kilo, +21% higher than the equivalent week last year. Spot rates from MESA origins rose by further +4%, WoW, taking them +58% above the levels this time last year, when they had just begun rising in the relatively early days of the Red Sea crisis. A +14% WoW rise from Africa has lifted spot rates from that region +25% higher, YoY. The only origin region where spot rates were lower than last year’s week 5 was North America (-5%, YoY).
China to US outlook remains unclear
The suspension of China’s access to the USA’s ‘section 321’ Customs-free ‘de minimis’ entry process looks set to have a significant impact on the China-US e-commerce market. The impact on air cargo is unlikely to be clearly visible, in data terms, until at least next week, although the extent is likely to be masked for several weeks by the effects of LNY.
China to Europe tonnages in week 5 recorded a bigger (-28%) WoW percentage drop than China to USA (-21%) volumes. However, China to Europe spot rates held up better in week 5, dropping just -1%, WoW, whereas China to USA spot rates saw a deeper (-8%) WoW fall, as per the WorldACD analysis.