Demand for air cargo surged in Asia, the Middle East, and India. The volume spike began in May 2024 driven by the ongoing disruptions in global container shipping. As shippers find it increasingly difficult to secure space on container vessels, they turn to air cargo freight solutions.
VOLUMES TRENDING UP
Early, unseasonable demand is a major contributor to the recent increase in air cargo volumes. The surge is due to several factors, including a pre-peak season rush, frontloading ahead of the U.S. tariffs taking effect on Chinese imports. Increased air cargo volumes are forcing urgent or time-sensitive cargo shippers to seek air freight. Analysts predict a strong year for global air cargo based on these trends. Data reflects surging air demand and volumes by 21% in May year over year. The resilient U.S. economy and strong e-commerce demand strongly support the market from China to North America.
DE MINIMIS POSES CHALLENGES
There is a potential challenge to air freight volume posed by the U.S. scrutiny of the de minimis rule, which allows the import of one package per day worth $800 or less without paying duties or tariffs. This rule is extensively used by China-based e-commerce giants. As such, the U.S. investigation into the impacts of de minimis may reduce cargo volumes from China. In late May 2024, Customs and Border Protection (CBP) suspended access for several customs brokers to its Type 86 program, a voluntary initiative aimed at facilitating low-value import shipments.
AIR CARGO PREDICTIONS
Despite these challenges, the International Air Transport Association (IATA) has upgraded its profitability expectations for the airline industry for 2024. Driven by strong air cargo demand and increasing passenger travel, total airline revenue for 2024 is expected to reach a record high representing a 9.7% year-over-year increase. Total air cargo volume is expected to reach 62 million metric tons in 2024, while the 4.96 billion passengers forecast to travel throughout the year will also be a record high. IATA noted that air cargo is continuing to correct following the exceptional pandemic year of 2021. Key metrics are moving from the mid-pandemic surge towards a return to more normal pre-pandemic trends and levels, including yields, capacity growth, and the belly cargo-freighter capacity split.
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