Despite a strong start for the air cargo business in the first quarter of this year, the underlying economic fundamentals point to more subdued growth for the remainder of the year. Compared to our last forecast prepared just under three months ago, we expect global air cargo growth for 2024 to be slightly lower - 8.9% vs 9.9%. Much of this is due to a slight downgrade of economic growth and trade projections, as well as a diminishing boost from cross border e-commerce volumes. Full year growth for 2024 will still be dependent on the recovery of manufacturing and small package volumes staying strong.
Posts tagged as “air cargo”
The e-commerce fuelled boom in US domestic air traffic appears to be over. This could have profound implications for the domestic air express business and the need for aircraft capacity in a market that is home to 43% of the world’s freighter fleet. Historically, there has been a strong correlation between growth in online shopping, overall economic growth and traffic moving through US domestic air express, e-commerce and general cargo networks. However, since late 2022 this relationship seems to have broken down – the market declined by 11% when the underlying fundamentals should have led to moderate growth in 2023 and acceleration in 2024.This article digs deeper into the data and provides an explanation as to what is happening.
The level of freight connectivity in parts of South and Southeast Asia will need to improve to support the region's world leading trade growth expectations - particularly in Indonesia and Vietnam. This article looks at the air cargo and container shipping connectivity. Connectivity is a key factor when it comes to sourcing decisions and the relative competitive advantage of different countries.
After two bad years of declining international air cargo volumes, we should be in for a good year – possibly somewhere in the order of 10% growth based on our latest forecast. For context, that would put us somewhere close to where we were at the end of 2021. Should we believe our own numbers? If cross border e-commerce traffic remains strong, manufacturing recovers and the outlook for global growth continues to improve then it is likely that we also see a recovery in air cargo traffic. The ongoing situation in the Red Sea forcing longer routings between Asia and Europe is also likely to increase the demand for air (and rail) freight on that lane.