Air cargo demand bounced up month-over-month in October, reversing a brief contraction seen in the prior two months likely driven by the brief strike on the East and Gulf Coast ports and China’s Golden Week.
During the month, global cargo tonne-kilometers (CTKs) grew by 9.8 percent over the year prior, according to the International Air Transport Association (IATA), marking the 15th consecutive month of annual demand growth. For nine straight months from December 2023 to August 2024, this metric jumped at double-digit pace.
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Month-on-month demand increased by 5.7 percent after seasonal adjustments, bucking the 0.4 percent decline in September and a 0.2 percent dip in August.
In year-to-date terms, the industry’s air cargo demand in October surged 12.2 percent compared to 2023. Concurrently, the latest recorded CTK volume reached a new year-to-date record.
In October, the largest contributors to the industry’s annual CTK’s growth remained carriers from the Asia Pacific region, followed by North American ones, taking the second spot for the first time since August 2023.
Of the industry’s 9.8 percent year-over-year demand increase, Asia Pacific carriers contributed 46.1 percent and North American airlines contributed 26 percent, said the IATA, which represents some 330 airlines comprising over 80 percent of global air traffic.
Another market data provider, WorldACD, said Asia Pacific carriers generated an even higher 56 percent of the tonnage increases throughout the first 10 months of 2024.
The IATA attributed October’s increased growth from the North American carriers to the three-day port strike in the U.S., in that shippers moving freight via ocean sought to mitigate the risk by transporting some commodities by air.
Additionally, the Golden Week holiday in China, during which factories nationwide shut down from Oct. 1-7, may have further boosted demand for air freight handled by these carriers.
Air cargo capacity, measured in available cargo tonne-kilometers (ACTKs), increased by 5.9 percent compared to October 2023, still below the near-double-digit uptick in demand.
Internationally, available air cargo capacity escalated 7.2 percent, largely driven by an 8.5 percent increase in international belly capacity. Dedicated freighter capacity increased by 5.6 percent, the seventh consecutive month of growth with volumes nearing 2021 peak levels.
Despite the annual capacity jump, which has resulted in record highs for 10 straight months, seasonally adjusted global capacity decreased 0.6 percent from the prior month.
Willie Walsh, IATA’s director general, noted in a statement that global air cargo yields, including surcharges, rose 10.6 percent year over year in October—marking the second consecutive month of double-digit annual growth. The rate index increased 1.2 percent from the prior month as well and is up a substantial 49 percent from 2019 levels.
Comparatively, WorldACD data listed similar 12 percent year-over-year increases in global rates, inching up 1 percent from the prior month.
“This favorable yield is partly driven by booming e-commerce, with Asian companies shipping products directly to American and European consumers,” the IATA said in its market analysis. “Additionally, the reduced reliability of ocean shipping and associated rate hikes, primarily due to geopolitical tensions, have led some shippers to switch from sea to air transport.”
The analysis is referring to the growth of online sellers like Shein and Temu, which have both been identified throughout 2024 as companies that have swamped air cargo capacity. The reduced reliability of ocean freight has endured since the end of last year as well, as container ships continue to avoid the conflict-ridden Red Sea amid an ongoing barrage of attacks by Yemen-based Houthi militants.
Looking forward to 2025, Shein and Temu are likely to keep flooding air cargo capacity throughout the year unless severe de minimis reform cuts in on their ability to ship goods duty-free.
However, there is still plenty of geopolitical speculation over anticipated tariffs to be put in place by the incoming Trump administration, which appear to now be an added 10 percent on goods originating from China.
Ahead of the President-elect’s Jan. 20 inauguration, U.S. importers have ramped up air cargo out of China to get out in front of any new tariff policies.
“While 2024 is shaping up to be a banner year for air cargo, we must look to 2025 with some caution,” said Walsh. “The incoming Trump administration’s announced intention to impose significant tariffs on its top trading partners—Canada, China and Mexico—has the potential to upend global supply chains and undermine consumer confidence. The air cargo industry’s proven adaptability to rapidly evolving geopolitical and economic situations is likely to be tested as the Trump agenda unfolds.”
