Mideast recovery helps steady global air cargo markets after weeks of turmoil
The sharp rise in global air cargo rates following the outbreak of war involving the US, Israel and Iran is showing signs of slowing, as a fragile ceasefire allows capacity to gradually return to the Middle East markets.
The data from WorldACD Market Data showed average global spot rates rose 1% week-on-week (WoW) in week 16 to $3.73 per kg.
That marks the smallest weekly increase since the conflict began in late February. Rates remain 46% higher than a year earlier and more than 40% above levels seen at the end of February.
The modest global increase was driven by a 3% WoW rise in spot rates from Asia Pacific origins to $5.14 per kg, up 41% year-on-year.
In contrast, rates from the Middle East and South Asia region fell 2% WoW to $4.74 per kg, though still 67% higher than a year earlier.
A ceasefire in place since April 8 has brought some stability to aviation markets in the region, after weeks of disruption following the escalation of military activity.
Jet fuel shortages hits freight volume
Global air cargo capacity was broadly flat in week 16, as a slight increase in freighter capacity was offset by lower bellyhold availability, partly due to industrial action in Germany and flight disruptions linked to jet fuel shortages and higher costs.
From Middle East and South Asia region origins, however, capacity rose around 7% WoW. This reduced the gap with pre-war levels to a deficit of 30%, from 35% the previous week.
The recovery was led by Gulf markets, where the capacity shortfall narrowed to 46% from 53%. Capacity in the Levant also improved, with the deficit shrinking to 20% from 29%. South Asia capacity was close to pre-war levels, down just 4%, broadly in line with the global shortfall of 6%.
Despite the return of capacity, cargo volumes from Middle East and South Asian origins fell 6% WoW, contributing to the decline in regional spot rates. Shipments from the region to Europe too dropped 3% WoW, with declines from India (down 4%) and Sri Lanka (down 14%) outweighing an 8% increase from Dubai.
Spot rates on this route fell 5% WoW but remained 82% higher than a year earlier, said the figures from WorldACD Market Data.
On routes from Middle East and South Asia to the US, chargeable weight slipped 1% WoW. Lower volumes from South Asia were largely offset by increased shipments from Dubai. Spot rates declined 4% WoW, leaving them 64% higher year-on-year.
Global volumes rebound after Easter
Worldwide cargo volumes rose 3% WoW in week 16, supported by a post-Easter rebound from Europe, where tonnages increased 11%, and Central and South America, up 9%. North America volumes rose 3%.
These gains were partly offset by declines from Middle East and South Asia and Africa, where volumes fell 6% and 4% respectively, reflecting ongoing disruption linked to the conflict.
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