Volatility the order of the day in many markets in 2020, says WorldACD. Air cargo rates rose sharply year over year (YoY) in November in contrast to a low double-digit decline in demand, although volumes did post a modest increase in the first two weeks of December on the same period the previous month, according to the latest data from WorldACD.
“Nearing the end of 2020, the world looks back at a year like no other in most people’s memories. Air cargo was no exception: the usual trends, established over many years, were no guidance at all for what actually happened. Volatility, both in volumes and in rates, has been the order of the day in many markets in 2020,” the market data specialist said in its monthly bulletin.
November saw a worldwide volume drop of 12.6% year-on-year (YoY), a percentage decrease which has more or less become the norm in the second half of 2020, it noted.
This was coupled with the strongest YoY rate/yield increase (in US dollars) since the “crazy” months of April and May: + 79% YoY, an increase substantially higher than in the previous months.”
“Yields/rates in November are usually about 4% above those in October; this year the increase was 11.2%, from US$2.97 to US$3.30 (per kg) on volume which was down by 2% month over month (MoM).”
Asia Pacific growth
WorldACD’s analysis showed that Asia Pacific was the only origin region which grew its air cargo business between October and November (by 3.2%). “Remarkably, yields/rates from Africa and MESA (Middle East & South Asia) dropped MoM. Not surprisingly, given the large orders of ‘PPE-goods’, shipments above 5,000 kgs grew YoY, whilst all smaller weight breaks lost between 16% and 29% YoY. The grimmest November statistic was this one: the transport by air of human remains grew by 8% YoY.”
Overall capacity went up by 1% from October to November with freighter capacity decreasing by 1% , whilst cargo capacity on passenger aircraft went up by 3% MoM. Load factors on passenger aircraft increased by one percentage point, and on freighter aircraft decreased (a slight drop of one percentage point).
Focusing on November yields/rates for some of the largest markets in the world, WorldACD’s analysis found that that the Hong Kong-USA Midwest route recorded the highest average (US$6.88/kg); the highest percentual YoY increase was on the UK-USA North East route (+289%);
the highest absolute change YoY concerned China East-USA Midwest air cargo (+US$3.43) and the hghest percentual change versus October 2020 was on the South Korea-Germany route (+58%.
WorldACD also highlighted the “fate” of each region’s top-3 origins in 2020 which it said could hardly have been more varied.
Of the 18 cities it reviewed, three increased their business in spite of the severe worldwide drop: Shanghai, Bogota and Santiago de Chile. The other 15 lost business, but in very different measures.
“For cities like Cairo, London and Mumbai, it must have come as a shock to their systems to see that business originating with them decreased by so much more than the worldwide average of 16% (Jan-November 2020).
“But in this uncommon year, volume changes are almost the minor part of the story. Take the case of Chicago: outbound business dropped by 9% (Jan-November YoY), but generated 10% more revenues for the airlines. At the same time, airline revenues from inbound traffic to Chicago increased by an incredible 92% YoY. Can things get any stranger?”
Early-December trends
As for preliminary figures for the first half of December, worldwide volume was 2% higher compared to the first half of November, showing a better MoM trend than the trend from October to November, WorldACD observed.
“Origin regions with the highest volume increase were Africa (+21%) and Central & South America (+8%). “Load factors show a consistent, though small, increase since the beginning of November. Worldwide average yields/rates (per kg) reached a level of USD 3.32 in the second week of December, two cents above the November-average,” it added.
Source: lloyd´s
