Air Cargo Peak Season Extends into 2024: Soaring Demand Outpaces Limited Capacity

The air cargo peak season, which started late last year, has continued into the first half of 2024 with demand consistently surpassing supply. According to Xeneta, volumes increased by 13% year over year in June, while capacity grew by only 3%, the slowest rate this year. This mismatch is pushing prices higher, and Xeneta’s chief air freight officer, Niall van der Wouw, cautioned that shippers should brace for even higher costs in the fourth quarter, with peak season surcharges expected by late August. Despite a projected slowdown in demand growth in the second half of the year due to strong comparisons with Q4 2023, van der Wouw emphasized the importance of securing Q4 capacity soon, particularly as demand in many Asian markets is expected to remain strong.

Rates on routes from Southeast Asia to Europe and the US increased significantly in June, driven by sustained e-commerce demand and shifts from ocean freight due to disruptions. Air freight volume has shown six consecutive months of double-digit growth, a trend likely to persist through the summer. However, capacity is not expanding as quickly as demand, especially on trans-Pacific routes where passenger flights have not returned to pre-pandemic levels. This imbalance, combined with market uncertainties, means shippers will face higher costs for shipping from Asia Pacific as the peak season nears.