WorldACD: Normality in air cargo still a long way off
17 / 08 / 2020
The latest data from WorldACD suggests that normality is still a long way off for the air cargo industry.
The data provider said that the demand side of the industry was slowly improving, with volumes in July up 8.2% compared with June.
However, demand is still down by 18.5% year on year, there is a “huge capacity drop” on last year and the price of air cargo is 62% up compared with 2019 levels at $2.83 per kg (in June the figure stood at $3.12 per kg).
“There is such a lack of capacity in the market that ‘normality’ still seems a long way off,” WorldACD said.
It pointed out that there was a 20 percentage point gap between the year-on-year drop in capacity and demand in July.
“The overall gap still hints at a worldwide market trying to find a new footing: ‘normality’ will not seem what it used to be.”
The data provider also pointed out that there were big differences in each market.
“The origins Europe and MESA (Middle East & South Asia) added most kgs to their June figures (13% and 14% respectively), whereby Europe managed to keep its prices reasonably stable (down 2.5% month on month).
“Asia Pacific was the region performing least in month-on-month percentage changes: a 6% volume growth was accompanied by a 14.4% drop in US dollar prices per kg.
“Business from China has captivated the air cargo world more than ever since the start of the Covid-19 crisis.
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“Coupled with a lack of capacity, this business has indeed attracted very high prices. Yet, the sky-high prices posted on the internet as so-called evidence of what happens in the China market, are often based on limited numbers of shipments (sometimes even ‘one-offs’), and therefore at best ‘anecdotal evidence’. This needs to be put in perspective.”
WorldACD said that between the May peak and July, prices from Asia Pacific as a whole fell by 41%, from $5.71 per kg to $3.38 per kg; prices ex-China dropped by 53%, from $7.80 per kg to $3.63 per kg; prices ex North East Asia lost 32%, fell from $4.66 per kg to $3.19 per kg; and prices from south Asia fell by only 13%, and now stand at $3.84 per kg at the highest region-to-worldwide level.
“Most of the pricing frenzy of the past months bypassed the Americas and Africa, where monthly deviations were much more measured than in other parts of the world,” it added.
“Lastly, taking a first preliminary view of the month of August, the first full week of the month showed a 0.3% volume drop week-over-week, and a 2% drop in worldwide prices. Having said that, prices ex-China seem to go up again, whilst prices from South Asia dropped.”