this time of year, it is usually the peak season for freight, but so far, it is difficult to find signs of the peak season for the air freight market. On the contrary, because of the slowdown in demand, capacity returned to the market, spot prices fell in the traditional peak season, more than six months of fixed-rate air cargo contracts almost disappeared in the fourth quarter.
when the rate level weakens, airlines usually extend the availability of block space agreements to freight forwarders, usually up to 12 months. But demand uncertainty is growing, and there is no sign of any interest rate floor, causing contracts more than six months to disappear.
Xeneta data shows that half of the global air cargo contracts reached between airlines and freight forwarders in October were three to six months, up from 36% in the third quarter. Spot market activity rose to 37% in October from 30% in the third quarter.
"shippers and freight forwarders believe that the high volatility of the market does not meet their long-term contract needs," Xeneta air cargo analysts said at the market conditions seminar.
November 9, DHL released a report on the status of the air cargo industry, pointing out that before the outbreak, air cargo demand and rates also surged rapidly from 10 to the end of the year. Air cargo in 10/2022 shows little sign of the surge in cargo that it should have in the fourth quarter. It seems unlikely that air transport in 2022 will be fully restored to pre-epidemic levels.
demand weakens as inflationary pressures increase in the US and Europe, while airlines are reinstating grounded capacity to service or increasing the frequency of long-haul flights to meet growing passenger demand, accelerating the rate drop in Asia.
"The outlook for air cargo remains uncertain. We are not seeing capacity pressure and we are not seeing rates rise, "Xeneta's chief air cargo officer said, adding that there was no sign of a peak at the end of the year.
At's recent air cargo forum in Miami, airline executives and freight forwarders said they don't expect high-season or traditional pre-Lunar New Year cargo growth in Asia, a view also shared by analysts.
At present, the outlook for global air transport demand is deteriorating. For example, the Airport Authority of Hong Kong, China (AA) said that in September 2022, the cargo throughput of Hong Kong International Airport (HKIA) decreased by 25% compared with the same period in 2021. Although global demand is low, transatlantic aviation still trades more than most markets. From a global perspective, this is a positive signal.
Marco Bloemen, head of Accenture Seabury Cargo, also said: "Last year was excellent, but this year will not be so good." Like Stifel, he believes the "interference" will continue. He expects the level of air trade in the fourth quarter to be between the fourth quarter of 2018 and the fourth quarter of 2019. "Long-term indications are that the economy will continue to grow. In the short term, caution is needed and there are significant headwinds."