The peak was not the peak season that was hoped for in November as air cargo demand fell 1 percentage point year-over-year. Air cargo saw the first decline since the road to recovery started six months ago, according to the latest industry statistics from analysts CLIVE Data Services and TAC Index. From a low of -37 percent in April, the gap in year-on-year air cargo volumes has been steadily closing in the subsequent months to the end of October, when margin versus 2019 volumes had reduced to -12 percent. In November, however, the gap rose slightly to -13 percent as the coronavirus continued to take its toll on global trade and international supply chains. This validates a signal first identified by CLIVE Data Services in the final week of October when air cargo’s ‘dynamic load factor’—calculated on both the volume and weight perspectives of cargo flown and capacity available—unexpectedly slipped by 1.5 percent. Also read: Global air cargo market continues uptrend in September New data for the four weeks ending 29 November shows that capacity—up 3.0 percent month-on-month—outpaced demand, with chargeable weight increasing by just 2.5 percent. Overall, available capacity was 21 percent less than a year ago. Consequently, despite rising to 72 percent in the opening two weeks of November, the dynamic load factor reduced to 70 percent for the second half of the month which, although 5 percentage points higher year-on-year, was still below the 8 percentage point load factor increase in October. “We saw a levelling off develop at the end of October which we stated might be indicative of a market which was cooling off a little, and this was indeed the case,” noted Niall van de Wouw, Managing Director of CLIVE Data Services. “After six months of small but encouraging improvements, the stalling of demand in November— typically a peak month when we’d expect dynamic load factor growth—could be seen as a further negative indicator,” he added. The managing director attributed the contrast with the impact of lockdowns and restrictions imposed by governments to slow the “second wave”, especially in Europe and the US, and the corresponding disruption to business continuity and consumer confidence, saying November arguably showed a degree of resilience against the uncertain operating environment. “The air cargo industry can also take some comfort from the positive news of successful vaccine developments and the global demand shipments of the vaccine will hopefully produce for air cargo supply chains. This will also bring more capacity to the market and hopefully coincide with a rise in consumer spending, which is hopefully a prelude to a more sustainable recovery in 2021.” Looking at major trade lanes, TAC Index reports airfreight rates in November increased significantly from Hong Kong and China to Europe month-over-month by 30 percent and 24 percent respectively, although rates from Hong Kong to both Europe and the United States flattened towards the end of the month and, week-on-week analyses shows China-Europe rates decreasing by around 6 percent towards the end of November. Robert Frei, Business Development Director at TAC Index, stated: “This is a fluctuating market. The increase in rates is likely to be the result of airlines selling more capacity on the short-term market and forwarders securing air cargo capacity through charter arrangements. Overall, in November, we did not see the rates one would have expected based on earlier anticipation of a strong peak season.”
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