But year-over-year analysis reveals opposite trend, according to WorldACD. Worldwide air cargo volumes increased in July while rates declined, according to new month over month (MoM) figures released by WorldACD Market Data.
However, year-over-year (YoY) analysis revealed the opposite trend with volumes down sharply and prices at far higher levels when compared to July 2019.
The July 2020 volume was 8.2% above the previous month, while last year’s July figure was up 5.5% MoM (on June 2019). In contrast, last month’s volume showed a fall of 18.5% YoY. As for the price of air cargo per kg worldwide, it was 62% higher YoY, but dropped by 9% MoM, from US$3.12 to US$2.83. This resulted in airlines’ combined air cargo revenues declining slightly for the first time since the start of the year.
WorldACD noted that since air cargo developments started to completely go “off the charts” in March 2020, every month the question arises whether the next month will be a bit more normal, whatever ‘normal’ may mean.
“So, are things getting a bit more normal? One of the other pointers to find the answer, is to be found in capacity data. There is such a lack of capacity in the market that ‘normality’ still seems a long way off.
“Take the gap between the huge capacity drop, measured in Available Ton Kilometers (ATK), and the much smaller drop in cargo transported, measured in Freight Ton Kilometers (FTK): the gap was only 1 percentage point MoM, but over 20 percentage points YoY. The MoM change of the worldwide load factor was +1%, but with clear differences between freighters (+3%) and passenger aircraft (-8%). Though pointing to a fairly balanced change in both capacity and traffic between June and 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.”
WorldACD’s air cargo data also highlights significant regional differences.
The origins Europe and MESA (Middle East & South Asia) added most kilograms to their June figures (+13% and +14% respectively). Europe managed to keep its prices reasonably stable (-2.5% MoM) while the Asia Pacific region reported 6% volume growth and a 14.4% drop in rates per kg.
WorldACD said business from China has “captivated” the air cargo world more than ever since the start of the COVID-19 crisis. “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 into perspective.”
WorldACD highlighted some of the changes in ex-Asia rates in July compared to the ‘top-dollar’ prices charged in May 2020.
For example, rates from Asia Pacific as a whole fell by 41%, from $5.71/kg to $3.38/kg; ex-China rates dropped by 53%, from $7.80/kg to $3.63/kg; ex-North-East Asia rates declined by 32%, falling from $4.66/kg to $3.19/kg; while rates from South Asia fell by “only” 13%, and now stand at $3.84 USD/kg – the highest region-to-worldwide level.
WorldACD underlined that most of the “pricing frenzy” of the past months bypassed the Americas and Africa, the monthly variations being “much more measured than in other parts of the world.”
Meanwhile, revenues from air cargo expressed in US dollars, rose by 10% MoM for business originating in Europe, by 9% from Africa, by 6% from MESA and by 3% from Central & South America. However, they fell by 1% from North America and by 9% from Asia Pacific.
As for a preliminary view of the first full week of August, WorldACD’s data showed a 0.3% volume decline week-over-week, and a 2% decrease in worldwide prices.” Having said that, prices ex-China seem to go up again, whilst prices from South Asia dropped.”
On the issue of COVID-19 accelerating shifts in how companies across the world source and distribute goods,WorldACD remarked: “In times of supply chain disruptions, as experienced strongly this year, there is always talk about the need to shorten the chains in order to become less dependent on events that business cannot influence. Whilst plans may be made, our figures for the year so far do not show any trend toward near-shoring yet.”
Source: lloyd’s
