International air freight rates rise for sixth consecutive month
According to Xeneta's latest market analysis, the rapid recovery of global IT disruptions in July did not have a significant sustained impact on the recovering demand for air freight,
with air freight rates rising for the sixth consecutive month.
In July, the average spot freight rate for global air cargo reached $2.66 per kilogram, a year-on-year increase of 20%. This is once again driven by the
strong growth in global air cargo demand, with a 13% year-on-year increase in air cargo volume in July due to
strong e-commerce demand in Asia and a lower demand base for the same period in 2023.
In contrast, the growth rate of global air cargo capacity supply in July was much slower, only increasing by 2%.
The growth in demand coupled with a slight increase in capacity supply is expected to boost the global dynamic loading coefficient. The dynamic loading coefficient in July was 5 percentage points higher than the same period last year, reaching 59%. The dynamic loading factor is an indicator used by Xeneta to measure capacity utilization based on the volume and weight of air cargo
and available capacity
With the start of the peak summer holiday season in July, global air cargo demand has slowed down month on month. The maritime container market has also experienced a similar situation, with container space becoming easier to book in recent weeks, and spot freight rates on major routes from the Far East to Europe and America either decreasing or remaining unchanged.
On July 19th, the global IT disruption affecting Microsoft systems caused widespread disruption, with flight delays and cancellations lasting for over a week. The resulting backlog of cargo increased the loading factor of some affected airlines by 4 percentage points compared to the previous week. It was not until July 28th that the loading factor basically returned to the level before the interruption.
As usual, the short-term panic of shippers and freight forwarders pushed up freight rates. In the last week of July, freight rates rose to their highest level so far this year, with the global average air freight spot rate rising to $2.7 per kilogram.