WorldACD Global Air Freight Trends – Week 15 (7–13 April)

WorldACD’s Week 15 report shows that the global air freight market has recovered slightly after the Eid al-Fitr holiday, but US-China trade tensions continue to weigh on demand and freight rates, especially in the trans-Pacific.

air freight cargo

Global cargo volumes increased by +3% in Week 15 (7–13 April), after falling -7% the previous week as many markets were closed for the Eid al-Fitr holiday. However, compared to the same period last year, this recovery was less than half the decline in Week 14, indicating that demand continues to be negatively impacted by uncertainties related to the trade conflict initiated by the US government.

The latest two-week to two-week comparison (2Wo2W) recorded global toll volumes falling -6%, a steeper decline than the -4% recorded in week 14. However, on a year-on-year (YoY) basis, volumes still increased +9%, up from +7% in the previous report, but this positive trend was mainly due to Eid al-Fitr falling in week 15 of last year.

The global freight price increase in recent weeks has slowed down, with the average price falling from US$2.50/kg in week 14 to US$2.48/kg (-1%) in week 15, slowing the 2Wo2W increase from +3% to +2%. The uncertain trade situation has caused many businesses to delay investment and purchasing decisions, or even cancel orders - this has reduced demand while transport capacity increased +1% in 2Wo2W. Rates in Week 15 were still up slightly +2% year-on-year, according to data from over 500,000 weekly transactions from WorldACD.

Following the Eid al-Fitr holiday, volumes increased week-on-week (WoW) in Africa (+13%) and the Middle East & South Asia (MESA, +12%). Volumes also increased +4% in Asia-Pacific and +3% in Central & South America, while Europe and North America recorded declines of -1% and -2%, respectively.

Among the regions, North America was the only one to see a weekly increase (+4%). Rates from Europe and Central & South America were unchanged, while they decreased -2% from Asia-Pacific, -3% from Africa and -4% from MESA.

The -2% decline in Asia-Pacific rates was largely due to a post-Eid recovery in intra-regional and MESA volumes, which pulled down global average rates.

Asia-Pacific to North America, on the other hand, saw a +6% 2Wo2W increase in rates, but volumes on this trade fell -5%.

Asia-Pacific exports face challenges

Despite a +4% weekly increase in Asia-Pacific export volumes (partly due to a post-holiday recovery), there are signs of weakness on the trans-Pacific trade. US volumes fell -3% for the second consecutive week, marking three consecutive weeks of declines on this trade. In particular, volumes from China and Hong Kong fell more sharply, from -2% in week 14 to -7% in week 15.

Amid escalating tensions between the US and China, along with some US businesses (including Amazon) cancelling orders from Chinese suppliers, the prospects for a recovery in cargo traffic on this route are bleak.

The decline also shows that the wave of online purchases by US consumers to "take advantage" of the policy of canceling de minimis tax exemptions on e-commerce goods from China, which took effect on May 2, has not been strong. One factor that could soften the impact is the US government's decision to temporarily exempt items such as laptops, mobile phones and semiconductor chips from China.

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