Airfreight growth continues in August 2024, led by e-commerce and regional demand

Capacity growth continues to lag traffic adding pressure to supply chains

While airfreight traffic surged, global airfreight capacity, measured in available cargo tonne-kilometres (ACTK), expanded by only 6.2% year-over-year in August, which marked the sixth consecutive month in which capacity growth has lagged demand, creating supply pressures. Regionally, airlines based in Africa (10.5%), Europe (9.4%), and Asia-Pacific (8.6%) led capacity expansion. However, even with increased cargo space on passenger flights – up 10.9% in August – belly capacity growth was at its slowest pace since the second quarter of 2021. Meanwhile, dedicated freighter capacity increased more modestly by 5.0% year-over-year.

In October, the strike at US East Coast and Gulf ports had raised concerns of damaging disruptions to supply chains, however, its relatively swift resolution helped stabilise pricing and alleviate uncertainty within international airfreight markets, easing pressure on logistics providers.

Improvements in load factor and yield signal market strength

Global air cargo load factors have also improved, reaching 44.0% in August, a 2.0 percentage-point increase from the previous year. European airlines led the industry with a 50.1% cargo load factor, while Asia-Pacific and Middle East carriers followed closely with load factors of 46.6% and 44.5%, respectively. This increase in load factors has contributed to a steady rise in industry-wide cargo yields, which has been a consistent trend throughout 2024, reflecting healthy demand.

Outlook for Q4 2024 and beyond: E-commerce and capacity constraints

The outlook for air cargo remains optimistic, with growth expected to continue into the fourth quarter of 2024. However, capacity constraints from the leading aerospace manufacturers could create bottlenecks should demand continue to grow into 2025. Proposed legislation in several developed economies, however, could impact e-commerce growth, potentially affecting airfreight demand in the long term. Nevertheless, relatively high container shipping rates compared to airfreight costs continue to make air cargo an attractive option for shippers during the current peak season.