The good times for air cargo may be coming to an end as demand displayed only limited increase in May after four months of reasonably satisfactory growth, according to WorldACD. Moreover, Drewry reports that freight rates have slumped to their lowest levels in a while.
Worldwide year-over-year growth was just 1.8% in May, while worldwide yield was down by 2% compared to April, fueling suspicions that air cargo may have to face some adverse market conditions once again, said WorldACD in its latest analysis.
Europe and North America, the best performers in terms of volume only one month ago, now lagged behind, together with Central & South America. But the Americas did best in yield compared with May 2014.
Growth in May came specifically from Africa and the Middle East & South Asia (MESA), with year-over-year increases of 8% and 5.5%, respectively. MESA was also the fastest growing destination.
Again, perishables and pharmaceuticals were the engines of growth, growing in volume by 7% and 13%, respectively.
Rates on a dive
Meanwhile, the latest Drewry East-West Air Freight Price Index disclosed that rates are now at their lowest level since the index began in May 2012.
Rates on the 21 east-west routes monitored by Drewry now register at US$2.91 per kilogram, while the index, which uses the May 2012 rate as a base level of 100, has slipped to 89.8 points.
It is the first time Drewry’s records show that prices have slipped below the $3 mark.
In its Sea & Air Shipper Insight analysis, Drewry attributed the cut to softening demand and overcapacity. It expects pricing to remain subdued over the coming months.
“Drewry expects air freight pricing to remain weak over the next few months, as carriers release additional passenger capacity to cope with the Northern Hemisphere summer holiday season,” it said.
Photo: BriYYZ
