Global air cargo demand up 3% YoY in Dec: DHL
The DHL report emphasizes an upswing of 10% in air cargo capacity compared to December 2022
Global air cargo demand increased three percent in December compared to December 2022, according to the latest Air Freight State of the industry report by DHL Global Forwarding.
Despite a slight increase in output price inflation observed in November 2023, it remained among the lowest levels seen in the past three years, contributing to an environment of relative stability. “PMI index increased to 50.4 in November from October's 50.0, indicating a slight revival in production growth. Global demand remains low, leading to a decline in demand-driven price pressures towards their long-term average,” the report added.
The report emphasises an upswing of 10 percent in air cargo capacity compared to December 2022. The growth is attributed to a 17 percent increase in passenger belly cargo capacity. However, certain regions experienced capacity constraints during Q423 due to higher seasonal demand, resulting in industry backlogs.
Global average rates experienced an upward trend with an increase of eight percent in December 2023 compared to the previous month, although there was an 18 percent decline compared to the same period last year. The increase in spot rates from the Asia Pacific region, driven primarily by China, was notable due to strong e-commerce expansion.
Flight operations to Tel Aviv continue to be suspended due to the on-going conflict between Israel and Palestine. Lufthansa Group plans to partially resume flights to Israel in January 2024 while flights by American Airlines and Delta Air Lines remain temporarily on hold.
2024 outlook
Middle East carriers are anticipated to lead with a projected 12.3 percent increase in demand in 2024, followed by Latin America at 7.7 percent, Europe at 4.1 percent, Asia Pacific at 3.6 percent, North America at 2.1 percent, and Africa at 1.5 percent. Notably, airlines from all regions reported higher tonnage in October, with Middle Eastern carriers exhibiting the most substantial growth at 10.8% YoY.
The forecast for EIA Brent crude oil spot price is anticipated to increase from $78/b in December 2023 to $84/b in the first quarter of 2024. The escalated instability arising from conflicts in Israel and the potential spread of tension in the Middle East introduces risks to both oil supply and surplus production capacity.