A Surge in Global Demand
As the global economy gradually recovers, the air freight market in 2024 is gearing up with unprecedented vigor. According to the latest report from Xeneta, the sector is poised to navigate the waves of both challenges and opportunities, aiming for new peaks in growth. The data from May shows a remarkable 12% year-on-year increase in global air freight demand, marking the fifth consecutive month of double-digit growth. This robust trend signals a promising year ahead, reflecting accelerated global economic activity and the growing need for diversified and flexible supply chains.
Rising Spot Rates
Driven by surging demand, spot rates have also seen a significant uptick. In May, global air freight spot rates rose by 9% year-on-year, reaching a new high of $2.58 per kilogram. Notably, routes from the Middle East and Central Asia to Europe experienced a staggering 110% increase in spot rates, highlighting the intense market activity in specific regions. Similarly, rates from Southeast Asia and China to North America saw substantial growth, at 65% and 43% respectively, further underscoring the vibrancy of global trade.
Regional Disparities and Hotspots
While different regional markets exhibit varying performances, a common trend emerges: a rapid global increase in air freight demand. China, often dubbed the world’s factory, has seen particularly strong demand for air freight for its export goods to Europe and North America. This surge is driven by both supply chain restructuring and diversified consumer demand.
Uncertainties and Potential Challenges
Despite the optimistic outlook, certain uncertainties loom over the market. Changes in U.S. policies regarding e-commerce goods from China could act as a “ticking time bomb” for the global air freight market. If these adjustments lead to a reduction in U.S. consumer purchases, the ripple effects would inevitably impact global demand. Industry players need to remain vigilant and flexible in responding to potential market shifts.
Market Strategies: Long-Term Contracts as Safe Havens
In the face of market volatility, shippers and freight forwarders are adopting strategies to mitigate risks. Data indicates a significant increase in the proportion of shippers signing contracts exceeding six months, rising to 28% in Q2 2024. By locking in freight rates through long-term contracts, shippers and forwarders can avoid the risk of rate fluctuations during peak seasons and better plan and manage supply chain costs.
Looking Ahead
With ongoing recovery in global trade, the air freight market’s vibrant outlook is indeed promising. The upcoming 18th China International Logistics and Supply Chain Expo, scheduled for September 23-25, will once again gather industry leaders in the air freight sector. Exhibitors will showcase their innovative spirit and practical achievements, injecting continuous new vitality into the industry’s sustained prosperity and development.
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