More shippers are looking to lock in air freight rates via longer-term deals with freight forwarders, according to Xeneta’s 2024 Outlook Mid-Year Air Freight Update.
The Xeneta’s report begins with global air cargo demand growing by 12% year-on-year over the first seven months of 2024. Several key factors contribute to this demand growth:
- fast-rising cross-border e-commerce demand from Asia;
- disruptions in sea transport due to the Red Sea shipping crisis;
- a broader general cargo demand increase driven by high-tech semiconductors for high-performance computing;
- last year’s low base.
On the supply side, Xeneta says that global air cargo capacity grew by 4% in the first seven months of 2024.
This supply-demand imbalance has led to a significant increase in air freight spot rates. Xeneta notes that traditionally summer months witness a slack in demand and rates; however, 2024 has seen rates climb to unprecedented levels, particularly in the outbound Asia markets.
Looking ahead, the report suggests that geopolitical tensions will continue to exert influence on the air cargo market.
In response to the volatile market conditions, there is a strategic shift among shippers and freight forwarders towards securing longer-term contracts. Shippers are keen to have rates guaranteed for the Q4 peak season due to fears over capacity limitations.
Source: trans.info