Up, Up, And Away Supply-demand imbalance pushes air cargo rates to their highest level in 2024.
opened in 2016 and 2017, respectively, and the completed cargo campus encompasses about 900,000 square feet of facility space with parking for 13 jumbo freighters. An ambitious cargo modernization project is in the works at Los Angeles International Airport (LAX), which ranks as the fifth-busiest U.S. airport for air cargo tonnage and has three cargo areas encompassing 27 buildings totaling approximately 2.6 million square feet. The new plan features a two-story facility with airside access covering 1.6 million square feet of total floor space, with automated material handling equipment for improved cargo throughput. Other elements include a truck staging lot, off-site cargo support facilities, and a truck management system. Meanwhile, construction started in 2023 on the E-Commerce and Express Freight Terminal at Ted Stevens Anchorage International Airport, the third-busiest cargo airport in the world. The new terminal is designed in part to accelerate the delivery of ecommerce packages to Alaska and the rest of the United States. The project is expected to be complete by the end of 2025. FLYING FORWARD Experts say airfreight demand will rise through the end of 2024 and into 2025, spurred by increased ecommerce volumes from China and the growing demand for high-tech goods. “The rise of artificial intelligence and the introduction of new electronics will drive demand for high-tech commodities such as semiconductors,” Liu explains. “And, as manufacturing shifts to Southeast Asia and India, more finished products will be routed through key Asian hubs like Hong Kong, Taiwan, Japan, Singapore, and Korea, potentially creating capacity challenges in the coming years.” “Ecommerce volumes out of China during the upcoming peak season will set new records,” predicts Zhang. “We also have to factor in the ongoing impact
20
120
Demand
13 13
13 12 10
10
10 11
8
% change YoY (LHS) Chargeable weight index (RHS) (monthly avg 2023 = 100)
10
110
6
4
2 2
0
100
110
Jul 2023 2024 Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul
-10
90
Supply
120
20
11
10 9
9
110
10
% change YoY (LHS) Chargeable weight index (RHS) (monthly avg 2023 = 100)
7 6
7
6
3 2
4 4 4
100
0
105
Jul 2023 2024 Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul
90
-10
DYNAMIC LOAD FACTOR (DLF)
65
20
60
10
3 3 3 4 4 5 59 %
2
pp change YoY (LHS) DLF in % (RHS)
0
55
0
-1
-3
-4 -4 -3
Jul 2023 2024 Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul
50
-10
20
3.50
FREIGHT RATE
17 20
7
2
10
3.00
% change YoY (LHS)
-6
2.66
-15
-18
-22
0
2.50
Spot rate in USD per kg (RHS)
-26
-30
-41 -39 -36
Jul 2023 2024 Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul
-10
2.00
Source: Xeneta
shows how important it is for shippers to plan ahead and maintain strong communication with their freight forwarders,” Liu notes. “Early bookings and accurate forecasts will be key to securing space on flights.” n
of conflict in the Red Sea. Shippers’ concern is understandable.” Capacity is already scarce for Q4 with most freighters fully booked and remaining flights and charter options close to selling out. “This scarcity
November 2024 • Inbound Logistics 45
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