In its latest update, CLIVE reports that westbound volumes were up 6% year-on-year in January despite high inflation and falling US retail sales, but global demand was down 8% due to the earlier Chinese New Year and economic headwinds hitting other major trade lanes.
Spot rates on the Europe to North America corridor were down to an average of $3.09 per kg, a fall of 4% from December, but when compared to the shrinking volumes from Asia Pacific and into Europe, transatlantic westbound demand remains buoyant.
CLIVE says the resilience goes against economic pressures facing consumers in the US, citing inflation of 6.5% in December, above the 2% target for the 21st consecutive month, though down 2.6 percentage points from its peak in June.
Economic headwinds are hitting Europe hard with double-digit inflation since August, registering 10.4%, hitting both retail sales and air cargo.
Inbound Europe chargeable weight fell for a 13th consecutive month in January with volumes down 9% year-on-year.
Overall air cargo volumes fell 8% in January and were down 10% on 2019, contributing to spot rates declining 37% to $2.89 per kg, bringing them to 55% above pre-pandemic levels.
Global capacity increased by 11% year-on-year, putting it 2% below 2019 levels.
The global average dynamic load factor was 54% in January, declining 7 percentage points in a year as capacity increased and volumes decreased.
It is down 5 percentage points compared to 2019 as the supply and demand balances starts leaning towards oversupply.
Niall van de Wouw, Chief Airfreight Officer of Xeneta says that the early Chinese New Year it harder to make judgements about January due to factories closing for the holidays, saying, “There is still a high level of uncertainty but, if rates haven’t yet reached the 2019 level in value in the current climate, and with an expectation that inventory levels will need restocking at the end of Q2 and Q3, then it’s unlikely we will see spot rates return to the pre-pandemic level unless this happens soon. But this, of course, partly depends on consumers spending in a similar fashion as we have seen recently.”