Recent data indicates a notable descent in air cargo activity following a vibrant onset to the new year, linked to the disturbances in the Red Sea and the haste associated with the pre-Lunar New Year (LNY) period.

According to WorldACD’s analysis, China’s week six cargo volumes dipped by 2% compared to the prior week, while import tonnage plummeted by a substantial 15%. This decline succeeds an intense flurry of cargo activity from China, as exporters hastened to dispatch goods before the LNY festivities commenced. Furthermore, WorldACD anticipates a continued downtrend in tonnage, affecting both imports and exports, in the upcoming week.

An additional review covering the most recent fortnight indicated a global downturn, with demand shrinking by 3% relative to the preceding two weeks. This global contraction was largely attributable to a 7% fall in cargo services originating from Asia Pacific – a shift WorldACD attributes primarily to a significant 17% decline in intra-Asia Pacific transfers. The intra-regional market seems to be reacting more swiftly to the LNY holiday than larger long-distance markets.

WorldACD has consistently emphasized the difficulty in evaluating the intrinsic vigor of the air cargo industry during the initial two months of the year, attributing this challenge to the variable timing of the LNY celebration. For context, in 2023, the LNY holiday began on February 10, differing markedly from last year’s January 22 start. While the global tonnage for the current year thus far exceeds that of the previous year, comparisons are complicated by these differences in timing.

A more definitive assessment of market trends is expected to surface by month’s end, according to WorldACD, suggesting that a clearer understanding of market dynamics is on the horizon.

On the forefront of industry responses, Taiwan-based freight forwarding entity Dimerco noted a cooling airfreight market as the LNY approached, signifying waning demand and minimal conversion from sea to air transport. This subdued activity has led to an anticipatory reduction in flights by airlines during the LNY, due to lessened cargo loads, which could further exacerbate existing challenges within the sector.

Furthermore, Dimerco highlighted that some manufacturers have commenced early shutdowns of their operations in response to the declining demand.

Also sharing insights, Scan Global Logistics (SGL) concurred that the air cargo market might experience a slow period post-LNY. SGL’s analysis suggests that the recent surge can be attributed to a final push prior to the LNY and disruptions caused by the Red Sea situation which pressured shippers, particularly in Europe and the United States, to opt for airfreight to prevent stock shortages.

Noting that the conventional peak airfreight season in the concluding months of the year surpassed expectations, SGL views recent developments as indicative of an overall improvement in air cargo volumes, reflecting a resurgence from the pandemic’s challenging impact. However, SGL also cautions that the slower demand post-LNY could signify a brief pause in this upward trend.

As the air cargo industry continues to navigate through the effects of the COVID-19 pandemic, it remains crucial to closely monitor market dynamics and respond accordingly. The fluctuations seen during the pre-Lunar New Year period serve as a reminder of how external factors can significantly impact air cargo demand, highlighting the need for adaptability and resilience within the industry. As we approach the end of the first quarter, a clearer picture of market trends is expected to emerge, providing valuable insights for businesses to make informed decisions moving forward. Additionally, ongoing developments in vaccine distribution and potential changes in travel restrictions could also have a significant impact on international air cargo demand in the coming months. Thus, it is important for industry players to stay informed and agile in order to effectively manage any potential challenges ahead. Overall, while there may be signs of deceleration in air cargo demand currently, the outlook for the industry remains positive with continued growth expected throughout the year.

Conclusion

In conclusion, recent data has shown a decline in air cargo demand following a strong start to the year. The pre-Lunar New Year period and ongoing disruptions in the Red Sea have played significant roles in this downturn, particularly in major markets such as China and Asia Pacific. However, industry experts remain optimistic about the potential for continued growth in the air cargo sector, with indications of an overall improvement from the challenging impacts of the pandemic. As we move forward, it is important for industry players to closely monitor market trends and be prepared to adapt to any potential changes in demand or external factors. With an agile and resilient approach, the air cargo industry can continue to thrive amidst challenges and uncertainties. So while the current data may show signs of deceleration, there is still much potential for growth and success