Ecommerce is reshaping the air cargo landscape, now accounting for an estimated two-thirds of airfreight originating from China. As demand soars, freighter operators are leveraging the momentum to increase contract rates for 2024, making this peak season pivotal for the logistics industry.
A Shanghai-based logistics provider remarked:
“The rates this week to Europe and the US exceed the highest recorded last year. Ecommerce is the key driver, with volumes making up a significant portion of overall cargo.”
Rates on the Rise: A Data-Driven Snapshot
According to WorldACD, global air cargo rates rose by 2% week-on-week, hitting $2.84 per kg as of 1 December—the highest this year. Spot rates saw a 3% increase, driven by a 4% jump from Asia Pacific and a 3% rise from North America. The statistics tell a compelling story:
- China: $5.10 per kg (+7%)
- Hong Kong: $6.25 (+9%)
- Japan: $4.97 (+6%)
- South Korea: $5.49 (+6%)
- Taiwan: $4.07 (+5%)
- Vietnam: $4.88 (+3%)
Year-on-year, rates surged over 30% from Japan and Vietnam, and 46% from Taiwan, underlining the immense growth in demand from these markets.
Ecommerce, Congestion, and a Growing Need for Data Visibility
While ecommerce is driving demand, capacity constraints and airport congestion remain pressing challenges. The seasonal peak is expected to ease temporarily during Christmas but will ramp up again ahead of Chinese New Year on 28 January. The situation is further compounded by a pre-tariff rush ahead of potential US import tariffs in early 2025, prompting businesses to stockpile goods.
Freighter operators are already responding with record-high proposed rates for 2024, with increases of over £1.10 per kgto Europe, compared to the prior year. This trend emphasises the growing complexity of managing supply chains amid volatile market conditions.
As demand continues to outpace supply, the industry faces mounting pressure to adopt advanced supply chain visibility and climate impact software. These tools can provide real-time data insights, empowering BCOs and Logistics Service Providers (LSPs) to make data-driven decisions and counteract supply chain disruptions effectively. Such visibility is no longer optional—it’s critical for navigating the complexities of modern logistics.
Industry Insights: A Maturing Air Cargo Market
Despite these challenges, experts note that the industry is demonstrating newfound maturity. Niall van de Wouw, Chief Airfreight Officer at Xeneta, stated:
“We’re witnessing a more grown-up air cargo market, with better resource allocation and improved terms for all parties involved. The industry is firing on all cylinders, but it’s under control—unlike the chaos of prior peaks.”
This level-headed approach is key to maintaining stability as markets evolve. However, with shifting trade routes driven by the relocation of manufacturing to Southeast Asia, businesses must adapt their strategies to remain competitive.
Looking Ahead
The air cargo market is evolving rapidly, driven by ecommerce demand, trade policy shifts, and capacity challenges. To stay ahead, LSPs and BCOs must adopt real-time supply chain visibility solutions. These tools will empower them to make informed, critical decisions, ensuring they remain resilient in a dynamic global market.