Global air cargo spot rates hit three-year high

GLOBAL air cargo spot rates are reported to have surged +30% year-on-year in April to USD 3.34 per kilo, their highest level since October 2022.

Air cargo analysts Xeneta say the worst may be over for shippers as capacity returns on routes most affected by the Middle East conflict.

Xeneta chief airfreight officer Niall van de Wouw said “the worst may be behind us” as rate increases showed signs of easing, even on corridors most impacted by the conflict.

“This is all logical because the spike in airfreight rates was driven by a supply issue from the start,” Mr van de Wouw said.

“Now capacity is coming back, rates will come down, but not as quickly as they went up. Ultimately, market fundamentals will prevail.”

Mr van de Wouw said this would be welcome news for shippers who had been postponing third and fourth-quarter tenders with freight forwarders and ‘buying time’ while waiting for the market to normalise.

“Global cargo capacity has largely recovered to pre-shock levels, and the jet fuel shortage, though reportedly spreading, has yet to grip long-haul intercontinental routes at scale,” he said.

“If those conditions hold, spot rates should ease in the weeks ahead and deliver some reprieve for shippers who have grown accustomed to unwelcome surprises.”

As shippers reportedly focus on acquiring the capacity they need for the second half of the year at a fair and equitable price, he advised them to gain a better understanding of how freight forwarders were moving their goods.

“In terms of the big trade flows, airfreight is mostly intercontinental, and these will be the last flights airlines will cut,” Mr Van de Wouw said.

“Domestic or regional flying might be trimmed on marginal routes or flights merged so they’re fuller of passengers, but if it comes to a point where airlines are cancelling intercontinental flights because of a lack of fuel, then we have a bigger problem than just a lack of jet fuel.”