It reports an 8% year-on-year fall in October putting demand measured in chargeable weight 3% below pre-pandemic levels of 2019.
Capacity continues to recover but at a lower pace, remaining at 7% below pre-pandemic levels, contributing to a subdued dynamic load factor.
The dynamic load factor was 61%, 7 percentage points below 2021 and 1 percentage point below 2019.
Weeks away from Christmas, there is no indication of a peak, says Niall van de Wouw, Chief Airfreight Officer of Xeneta.
He says, “Demand worsened in October over the -5% reduction we reported in September, but this is not likely to surprise the market given the global economic outlook, although it’s clear that rates remain at a higher level than some observers would have expected in the current conditions.”
Looking ahead, van de Wouw sees more challenges and uncertainties over the next 12 months due to economic issues and consumers spending more on services than goods.
Even if consumers were spending on goods, more cargo would transported by ocean freight.
He says, “Airfreight received a boost in the last two years because of the incredible mess on the ocean side, but shippers are now likely to feel more comfortable moving back to ocean from a reliability point of view. With all these factors combined, I don’t see where a lot of general freight growth demand drivers will come from.”
Rates continue to decline with Europe to US spot rates down 27%, Asia to Europe by 25%, and Asia to US falling most sharply by 45% year-on-year.
Shippers may not see long-term gains right away, van de Wouw says, “There is a lot of uncertainty, so this is not a period where shippers will get an ‘attractive’ deal for the next year or two years, they will get lower rates for the next one to two quarters, but who knows what will happen beyond that.”