Air cargo traffic in March showed year-on-year (YoY) worldwide growth of 21%, the corresponding month of last year having been significantly impacted by COVID-19, according to the latest analysis by WorldACD.
«To make any sense of this percentage (increase), we need to revisit the detailed results for March 2020,» the market data specialist said, underlining that the first and second hal of the month in question had displayed the sharpest of contrasts «in air cargo living memory.»
To bear this out, the YoY growth in the period 1-15, March, 2021, stood at −0.2%, whereas in the second half of the month it was +44%, «a clear reminder that the first lockdown started to bite air cargo by mid-March 2020,» WorldACD observed.
«As the cautious recovery of early 2021 (+1.1% YoY for the first two months) was halted in the first half of March (-0.2% YoY), the question arises whether the second half reversed the trend again.»
Volume ’only marginally lower’
In its monthly analysis, WorldACD first looked at volume developments for the 30 largest markets.
For six of them (the origins USA Atlantic South, USA Midwest, Taiwan, Thailand, Belgium and Kenya), March 2021 «was simply the best month since January 2018. The same was true for the destination markets China-East, South Korea, Japan, Belgium, the Netherlands and USA-Midwest.»
In contrast, other top-origins, notably China North East and Central, France, UK, India, and Australia, have not yet recovered. Their month of March remained more than 20% below their best month over the past three years. This is also the case for the destinations Australia, Canada East, China Northeast, Spain, South Africa and USA Northeast.
However, worldwide, March 2021 was only marginally lower than the same month in 2018 and 2019.
«This is the more remarkable when taking into account the enormous reduction in cargo capacity. YoY load factor improvements in each of the three first months of 2021, range between 15 and 20 percentage points: airlines are clearly able to use their cargo space much more efficiently than in the past.»
Market share gains for leading forwarders
For the full first quarter of 2021 (Q1), chargeable weight worldwide was 7.7% above Q1-2020, but still 2% below Q1-2019. Vulnerable & High-Tech, Flowers and Live Animals, however, did better than in Q1-2019, the first of these categories growing by an «impressive» 22%.
«Compared with Q1-2019, the 10 largest forwarders gained considerable market share in Africa (+2.4 percentage points) and Central & South America (+3.3% points), but lost share in the Northern hemisphere, ranging from a loss of 0.4% points in the Middle East & South Asia (MESA) to a loss of 2.7% points in Europe.
China driving air cargo growth
Until the financial crisis of more than 10 years ago, a country’s air cargo growth was often double the growth of the country’s economy. However, this 2:1 ratio has moved downwards since, WorldACD noted.
«Yet, it may be back to the old level in China. According to The Economist, China’s economy grew by 18.3% YoY in Q1. In the same period its outbound air cargo increased by 39% and its inbound by an even higher 41%. To no one’s surprise, China leads the Q1 air cargo growth tables by a large margin.»
The whole Asia Pacific area increased by 19% YoY (outbound), followed by the Americas (+10% YoY in the north, +6% YoY in central & south). Europe and Africa remained the same, whilst the origin MESA dropped by 10% YoY.
Since the start of the pandemic, it has been air cargo rates which have undergone the most drastic change, according to WorldACD.
"The Q1 YoY rate increase of 64% puts the much smaller volume gains in a rather different light. Not only do the rate increases highlight the capacity shortage and the short term financial influence of the pandemic, they may cause further changes in cargo capacity made available by passenger airlines.
«After all, with rates on full freighter flights up by 32% YoY.... and «those on passenger aircraft (having) almost doubled, airlines could be tempted to take a fresh look at the capacity they make available for air cargo.»
As to whether this is already happening, WorldACD said the increase in freighter capacity in March was seven percentage points lower than for cargo capacity on passenger aircraft, while the average rate/yield for all markets worldwide rose every week from mid-March to mid-April.
Volumes down in April
Looking at how things have shaped up in the current month, WorldACD stated that worldwide volumes decreased by 4% in Week 14 (5-11 April) on the previous week. Worldwide capacity was up slightly (+ 0.1%).
"On a regional level, the origin Central & South America did best with a volume increase of 4% week-over-week, while origin Europe showed the largest decrease (-13%).
The average worldwide yield/rate in week 14 increased compared with week 13.