After hitting a three-year high in the previous month, global air cargo spot rates jumped up again in May, rising +41% year-on-year, but the pricing pressures on shippers may start to ease in June, according to industry analysts, Xeneta.
May’s average global spot rate of USD 3.40 per kg was driven by market fundamentals as global air cargo demand stayed resilient – slightly ahead of expectations - and outpaced supply, which continued to recover from disruption caused by the Middle East conflict, ending the month above last year's capacity level by +1%. Demand grew +4% year-on-year in May, lifting the dynamic load factor two percentage points to 61%. Dynamic load factor is Xeneta’s measurement of capacity utilization based on volume and weight of cargo flown alongside available capacity.
While acknowledging most shippers’ understanding that rates go up during global events like the current conflict between the U.S., Israel and Iran, Xeneta’s Chief Airfreight Officer, Niall van de Wouw, believes some relief may be on the way in June.
“A lot of the air cargo market statements we made in April hold true,” he said. “Shippers clearly have a sense of ‘here we go again’ in terms of rates volatility, but they are adjusting and buying time by temporarily accepting the surcharges that come with extending existing capacity contracts. This is because they’re not ready to make a longer-term commitment until there are clear signs the market is normalizing.” (....)