The global air cargo market ended with a win/win outcome for airlines, forwarders and shippers as demand fell, spot rates registered a big fall but average rates remained well above pre-pandemic levels, according to CLIVE Data Services.

Data from CLIVE Data Services, part of Xeneta, says that cargo volumes fell for the 10th consecutive month due to lower demand, down 8% year-on-year and 13% compared 2019.

Capacity in December 2022 was at 93% of 2019 levels, putting CLIVE’s dynamic load factor down 7 percentage points year-on-year to 57% and 5 percentage points below 2019.

Niall van de Wouw, Chief Airfreight Officer of Xeneta, says taking a pessimistic view is not helpful as this time last year, there was no conflict in Ukraine, no high energy prices, no soaring interest rates and none of the cost-of-living pressures.

Spot rates are down 35% compared to this time last year but overall average rates are still 75% above pre-pandemic levels.

Van de Wouw says, “If, in January 2020, you had asked airline executives if they’d like to see airfreight rates across the Atlantic or from Asia Pacific 75% higher, we would have heard a unanimous ‘yes’. The difference now is that there’s less pressure if you’re a shipper, even though you’re still paying more. In terms of the long-term sustainability of the air cargo supply chain, this will help.”

Airfreight spot rates are falling, with Asia Pacific to North America down 13% since October, 58% on a year ago but 87% above 2019.

From Asia Pacific to Europe, the average rate dropped 10% between October and December, 46% year-on-year but was still 92% above pre-pandemic levels.

The air cargo market had a surprisingly strong start to 2022 but this year is likely to be impacted by an earlier Chinese New Year and rising Covid levels in China, which is already impacting factory production.

Van de Wouw says, “Of course, we wish the air cargo industry a very happy New Year, but it’s clear it remains in a very unpredictable state given world events. We don’t see demand recovering quickly because of what is happening around the world, but we do expect to see supply continuing to come back into the market.”