Weaker consumer confidence in certain key markets and earlier-than-normal shipping of stock by retailers and other customers has led to relatively subdued air freight demand this quarter, so far – and lowered expectations of any major winter peak season, WorldACD analysis highlights By Will Waters Air cargo prices and tonnages have stabilized in the past two weeks after dropping sharply in early October, but there are still no signs of a significant fourth-quarter (Q4) peak season, the latest figures from WorldACD Market Data reveal. In week 42 (October 17 - 23), worldwide chargeable weight slightly decreased (-1%) after recovering +3% the previous week, following an -8% drop in the first full week of October. Comparing weeks 41 and 42 with the preceding two weeks (2Wo2W), tonnages were 2% below their level in weeks 39 and 40, while average worldwide rates were stable, in a flat capacity environment – based on the more than 350,000 weekly transactions covered by WorldACD’s data. Bounce-back from Golden Week Across that two-week period, tonnages from all the main global origin regions decreased, except for outbound Asia Pacific, which saw a slight recovery (+2%), WorldACD highlighted. That may reflect a bounce-back from China’s Golden Week holiday in the first week of October, plus the reopening of some markets – including Hong Kong – following recent Covid restrictions. On a lane-by-lane basis, tonnages between North America and Europe dropped 4% in both directions, while an increase was recorded from Asia Pacific to, respectively, North America (+3%) and Europe (+2%). Europe-Africa recorded the biggest drop in volumes, declining 8% southbound and 6% northbound, WorldACD highlighted. Meanwhile, traffic from the Middle East & South Asia to Asia Pacific recorded both the highest increase in tonnages (+7%) and the greatest drop in prices (-13%). That lane has seen an influx of capacity since Russia’s invasion of Ukraine began in February, with the closure of Russian airspace to many airlines leading to some Asia-Europe cargo and services routed instead via the Middle East. On the pricing side, average rates stabilized for each of the main origin regions except for the Middle East & South Asia (-5%). On a lane-by lane basis, most of the other main trades saw relatively flat pricing, exceptions being a strong increase from North America to Asia Pacific (+7%) and a steep drop in intra-Asia Pacific rates (-10%), on a 2Wo2W basis, WorldACD noted. Year-on-year perspective Comparing the overall global market with this time last year, chargeable weight in weeks 41 and 42 was down 16% compared with the equivalent period in 2021, despite a capacity increase of 4%, WorldACD pointed out. Notably, tonnages ex-Asia Pacific are -23% below their strong levels this time last year, and Middle East & South Asia origin tonnages are -22% below last year. Capacity from all of the main origin regions, with the exception of Asia Pacific (-8%) and Central & South America (-5%), is significantly above its levels this time last year, including a double-digit percentage rise from Africa (+13%), and outbound Europe and North America (both +9%). WorldACD said worldwide rates are currently 17% below their level this time last year at an average of US$3.36 per kilo, despite the effects of higher fuel surcharges, but significantly above pre-Covid levels. It noted that “a combination of weaker consumer confidence in certain key markets and earlier-than-normal shipping of stock by retailers and other customers has led to relatively subdued air freight demand this quarter, so far – and lowered expectations of any major winter peak season”.