Air cargo demand remains strong to start the second quarter, with total demand rising at a double-digit pace for the fifth straight month.
According to the International Air Transport Association (IATA), total demand increased by 11.1 percent compared to the year prior, with airlines recording 21.7 billion cargo tonne-kilometers (CTKs) worldwide.
“While many economic uncertainties remain, it appears that the roots of air cargo’s strong performance are deepening,” said Willie Walsh, director general, IATA, in a statement. “In recent months, air cargo demand grew even when the Purchasing Managers Index (PMI) was indicating the potential for contraction. With the PMI now indicating growth, the prospects for continued strong demand are even more robust.”
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On a month-over-month basis, the demand cut back 6.5 percent from March. Seasonally adjusted demand grew 0.2 percent.
The largest contributors to the April traffic performance were carriers from Asia Pacific and Europe, which together contributed two-thirds to the annual increase. The two regions saw annual growth rates in international CTKs of 13.8 percent and 12.9 percent, respectively.
Traffic on international routes, which grew by 11.6 percent year over year in April, was “likely supported by booming e-commerce and capacity constraints in global maritime shipping,” the report said.
The IATA is likely referring to the continued expansion of online retail giants like Shein and Temu, which both ship goods directly from China directly to U.S. shoppers—resulting in more individual packages transported via air.
And as the ongoing assault on commercial vessels in the Red Sea lingered through the second quarter, Maersk estimated that the wider container shipping industry is seeing a 15 to 20 percent ocean capacity crunch on the Far East to North Europe and Mediterranean trade lanes due to lengthier route taken around southern Africa. This has likely forced many shippers on the Asia-to-Europe trade lane to consider the air freight alternative.
On the other hand, air freight capacity is still ticking up from last year. Capacity, measured in available cargo tonne-kilometers (ACTKs), increased by 7.1 percent compared to April 2023, and 0.9 percent above March 2024 figures. Year-to-date annual ACTK growth is even higher at 10.3 percent, showing the strength of the capacity increases over the full year, while also slowly decelerating from the prior capacity growth.
April’s expansion in ACTKs was driven by a surge in belly-hold capacity in passenger planes, which recorded the 36th consecutive month of double-digit growth in April at 15.2 percent. In comparison, capacity on dedicated freighters rose by only 5 percent.
The monthly update comes amid a report that Amazon and cargo airline Atlas Air are ending their partnership.
According to global supply chain publication The Loadstar, Atlas will reportedly begin phasing out its 17 767-300 freighters for Amazon in the coming weeks and will cease entirely by June next year.
The eight 737-800Fs Atlas flew for Amazon will begin to be phased out in January 2025, the report said.
Sourcing Journal reached out to Atlas Air and Amazon.
The move would occur four months after Amazon closed a cargo-handling facility in San Antonio, and eight after shuttering its air freight complex at Leipzig/Halle International Airport in Germany.
The report said no furloughs for pilots had been announced, but that the changes would affect some 760 crew members.
Despite the overall year-over-year increases reported by the IATA, Atlas pilots cited by Loadstar said “the utilization has been woefully low” and that the air carrier has “been losing a lot of money every year.”
All increases in demand thus far in 2024 have come against CTK totals that declined in 2023 from 2022, the IATA pointed out, suggesting that not all carriers have stood to benefit in recent years. So while 2024 does represent a bounce back of sorts for air cargo on the whole, the industry counted 85.3 billion CTKs year-to-date in April—just a 1.4 percent relative increase to the 2022 value.
The association highlighted another one of its metrics as a barometer for the state of balance between demand and supply within the industry. Cargo load factors (CLF), the percentage of actual available cargo tonne-kilometers, kicked up 1.6 percentage points on an annual basis to 43.9 percent, although it is down 3.5 percentage points from the prior month.
In January, CLF had its first positive annual percentage point change in two and a half years. The IATA states that rising load factors are beneficial for airlines because they drive both revenue and profitability at a given capacity.
