Air freight industry analysts CLIVE Data Services and TAC Index pointed out that a record ‘dynamic load-factor’, a significant improvement in tonnages carried, and high air freight rates on the world’s premier trade lanes in September showed global air cargo market edging towards a sustainable recovery at the start of the traditional peak season.

Chargeable weight in September rose by a remarkable 9% month-on-month, further narrowing the year-on-year gap to -15% – the fifth consecutive month of positive indicators since April 2020’s 37% decline in volumes versus the same month of 2019.

Meanwhile, global air cargo capacity in September was, on average, 25% less than in the same month of last year.

This combination of the recovering volumes or tonnages carried, combined with the still much-reduced global air cargo capacity, meant that CLIVE Data Service’s ‘dynamic load factor’ – based on both the volume and weight perspectives of cargo flown and capacity available – averaged 70% in September, a 2% increase versus August 2020 and 8 higher, year-over-year. Notably, the 71% figure for the week of September 28 – Oct 4 was the highest ever recorded by CLIVE.

Soaring rates

Constrained capacity in the market at a time of rising demand also led to significant increases in rates, according to TAC Index. “It is interesting to see how closely demand/volume and pricing correlate in light of the fact there are a lot less BSAs (Block Space Agreements) in place currently,” commented Robert Frei, Business Development Director at TAC Index. “There were steady increases in pricing, week-over-week in September, with rates on lanes from China/Hong Kong to the EU in the last week of September 8% higher than in the last week of August.”

Latest CLIVE Data Service and TAC Index analyses of the ‘dynamic load factor’ and air freight rates on transatlantic routes reported even higher gains. The elevated load factor for westbound volumes rose to 84% in September – up 18% versus September 2019 – while the eastbound ‘dynamic loadfactor’ was 67%. Corresponding westbound and eastbound air freight rates rose 170% and 73% respectively over the same period of last year.

Continued recovery

Niall van de Wouw, Managing Director of CLIVE Data Services said, “A fifth consecutive month of gradual air cargo market improvements may not be sensational news but, in this case, sometimes boring is good. In fact, our latest weekly analyses reveal more positivity than I would have expected based on the global impact of government actions to restrain the spread of COVID-19.

“The air cargo market seems to be quite resilient. In April, CLIVE stated that the industry’s downward performance was ‘bottoming out’ and this has proven to be correct, with month-over-month improvements ever since.

“While this might be encouraging news for airlines, it means shippers and forwarders are being faced with higher air freight costs. Uncertainty over how the market will develop alongside very high load factors is a toxic combination for the buyers of air freight capacity.”

Van de Wouw continued, “If this demand persists, and shippers are prepared to pay, we may well see resurgence in passenger planes being deployed mainly or solely for moving freight. These remain uncertain times but with more optimism in the market for October and November volumes, the question is: how far can the recovery go?”

CLIVE’s air cargo industry intelligence consolidates data shared by a representative group of international airlines operating to all corners of the globe. Based on both the volume and weight perspectives of the cargo flown and capacity available, it uses weekly analyses to give the air cargo industry the earliest possible barometer of market performance each month.

TAC Index is consolidating data shared by a representative group of international freight forwarders – a combination of global companies, SMEs, master loaders and local heroes – as it only using transactional data. Statistical filtering using the proprietary algorithms is applied to generate truly representative general cargo indices.

The analyst said its weekly pricing publications have changed the way forwarders, carriers and shippers as well as analysts can get insights into the developments. The fact that the indices are both fully antitrust and financial market compliant means they can also open up opportunities for the introduction of risk management tools that were not available to the air cargo industry.


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