The International Air Transport Association (IATA) released data for global air freight markets showing that air cargo demand rebounded in 2023.
The closeout to the year, which was characterized by generally softer world air cargo demand saw a particularly strong fourth quarter performance, despite the ongoing economic uncertainties.
In a notable rebound, the full-year demand for global air cargo reached a level just slightly below 2022 and 2019 figures.
2023 Fourth Quarter Performance
Despite lingering economic uncertainties, the air cargo demand in 2023 showcased resilience, with a particularly robust performance in the fourth quarter.
The data reveals a rebound, bringing the global full-year demand to a level marginally below that of both 2022 and 2019.
“Despite political and economic challenges, 2023 saw air cargo markets regain ground lost in 2022 after the extraordinary COVID peak in 2021,” said Willie Walsh, IATA’s Director General.
That puts the industry on very solid ground for success in 2024. But with continued, and in some cases intensifying, instability in geopolitics and economic forces, little should be taken for granted in the months ahead.”
Capacity and Demand Dynamics
In delving deeper into the numbers, it’s evident that while the global demand, measured in cargo tonne-kilometers (CTKs), experienced a slight decline of 1.9% compared to 2022, capacity, measured in available cargo tonne-kilometers (ACTKs), surged by 11.3% in 2023.
This surge in capacity, however, only translated to a modest 2.5% increase when juxtaposed with pre-COVID levels of 2019.
December 2023: Exceptional Performance
December 2023 emerged as a strong rebound month for the air cargo industry, witnessing a remarkable surge in both demand and capacity.
Global demand soared by 10.8% compared to 2022, marking the strongest annual growth in the past two years. Concurrently, capacity experienced a substantial uptick of 13.6% over the same period.
Key Indicators and Market Insights
Amidst the overarching trends, several indicators merit attention:
- Global cross-border trade witnessed growth for the third consecutive month in October, signaling a reversal from previous downward trends.
- Inflation rates in major economies such as the United States and the EU remained relatively stable, while concerns loomed over China’s persistent deflation.
- Leading indicators such as manufacturing output and new export order Purchasing Managers Indexes (PMIs) continued to hover below the 50-mark, indicating potential contraction in global air cargo demand.
Regional Performance Analysis
Examining regional performances offers valuable insights into the diverse dynamics at play:
Asia-Pacific: Despite challenges, the region showcased resilience, recording the best performance globally in December 2023.
North America: While the region faced a decrease in demand for the year, December saw a modest uptick.
Europe: Hindered by the conflict in Ukraine, European carriers struggled with decreased demand throughout the year.
Middle East: Witnessing consistent growth, the region posted an increase in both demand and capacity, fueled by stable geopolitical conditions.
Latin America: Emerging as a strong performer, Latin American carriers reported positive growth in demand and capacity.
Africa: Facing challenges, African carriers encountered a decline in demand, albeit with a notable increase in capacity.
Red Sea Disruption
The disruption in maritime routes across the Red Sea towards the end of 2023 led to a surge in air cargo demand. Shippers, compelled by urgency, turned to air transport, driving up yields across various trade lanes.
While disruptions subsided towards the end of December, the episode underscores the pivotal role of air cargo in maintaining global supply chains during extraordinary circumstances.
“The recent disruption to maritime routes in the Red Sea has seen some shippers pivot to air cargo. The increased demand saw a spike in air cargo yields on related trade lanes. A similar spike is expected in January as disruptions intensified. “
“While not all cargo is suitable for air transport, it is a vital option for some of the most urgent shipments in extraordinary circumstances. And that is critical to the continuity of the global economy, said Walsh.
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