“Limited capacity and volatile rates” was the main headline for the 2020 air freight market. As airlines canceled passenger flights and orders for PPE and essential supplies spiked, the cost to send goods via air freight hit new highs. Total air freight revenue was estimated at $108 billion in 2020.i 

  • What’s changed since the start of the pandemic?
  • And where is the industry heading? 

To answer these questions, we compiled the following air freight statistics. As you consider your mix of freight, these numbers can offer you some insights as you optimize your supply chain. 

Air Cargo Industry Growth 

0%
of typical airline growth

The cargo business has become a major driver for airlines. According to the International Air Transport Association (IATA), air cargo now makes up a little less than one-third of total operating revenue for airlines. In fact, that number was as high as 35% in 2020.ii 

Contrast that with 12%, which is how much cargo contributed to airline revenue in 2019.iii  

As the COVID-19 pandemic continues to evolve—and travel restrictions change accordingly—we may see air cargo maintain a strong role as a significant revenue stream for airlines. 

0%
growth over June 2019

Air cargo continues to see industry-wide growth above pre-pandemic numbers. In June 2021, total air cargo tonne-kilometres (CTK) increased by 9.9% versus June 2019.iv  This number tracks with May, which showed 9.4% growth when comparing 2019 to 2021.

Interestingly enough, May and June actually represented a slight slow-down. April 2021 saw growth of 12.0% in CTK compared to April 2019.v

May and June’s reduced numbers have led some to ask whether the air cargo market might be tapering down. Analysts from the AITA believe that’s not the case, noting that May and June are “typically slow months for air cargo.” Additionally, when comparing January-June 2021 with the same period in 2019, global CTK were up 8.0%. The AITA notes that this is the strongest first half of the year since 2017,vi a possible indicator for a robust outcome in 2021.

As numbers from the next few months become available, many will be watching to see which way the global air cargo market trends.

0%
air cargo growth in airlines based in Africa

Globally, many regions saw their air cargo volumes increase. Airlines based in Africa led the pack with 33.5% growth in CTK in June 2021 vs. 2019. North America-based airlines were close behind at +23.4%, followed by Middle East-based airlines at +17.1%.vii

The only region that didn’t post growth was Latin America. Air cargo volume for Latin America-based carriers was down 22.9% in June, compared to 2019.viii Several large carriers in the region have filed for Chapter 11 bankruptcy, which has resulted in a significant reduction in fleets. Additionally, they’ve lost market share to competitor airlines based in North America and Europe.ix

Air Freight Capacity

0%
reduced capacity, compared to June 2019

The industry continues to deal with reduced air freight capacity, with available CTK in June 2021 at 10.8% below June 2019. However, there’s cause to be optimistic that capacity may increase. In May 2021, capacity was 11.2% lower than pre-pandemic levels, x so capacity actually increased in June—if only slightly.

0%
reduced belly capacity

Where it comes to dedicated freighters, capacity is actually higher than 2019 levels. In fact, in June, freighter capacity clocked in at 29.7% above 2019. However, air freight belly capacity remains significantly reduced. The AITA’s June analysis put that number at 38.9% less than June 2019.xi A Partner at McKinsey & Company stated that number might be as much as 50%.xii

In other words, until more international belly capacity is available, air freight will likely continue to see a capacity crunch. As the next numbers reveal, there might be cause for some optimism in this regard.

0%
reduced airline seat capacity

Globally, the travel data provider OAG reported that airline seat capacity was down by 32% in July 2021, as compared to 2019.xiii However, airlines did see an 18.5% increase in capacity from June to July 2021, which offers some hope for future belly capacity. Whether that trend continues will depend on the evolution of the COVID-19 virus—and local regulations in response.

Air Freight vs. Other Modes 

0%
ocean freight schedule reliability

Those who are looking to other modes of transportation might not find solace in ocean freight solutions. Sea-Intelligence reported that the schedule reliability of ocean carriers is at a low: 40%, as compared to the pre-pandemic number of 70-80%.xiv

In other words, as you likely already know, challenges are cropping up in a number of different freight modes. So what can you do about it?

Working with 2021’s Supply Chain Challenges 

In summary, the air cargo market has not yet cleared the hurdles that cropped up in 2020. Demand is still high. Capacity is still tight. As a result, rates remain volatile.  If you’re using air cargo to move goods or supplies, give yourself extra time. Schedules continue to fluctuate as airlines cancel passenger flights due to staff shortages and operational challenges. Adding in additional lead time will help your supply chain run more smoothly.  

By the way, this tip works well for all modes of freight right now. If you’d like to dig deeper, check out our article on four strategies for combatting 2021’s supply chain challenges. 

Finally, keep in close contact with your forwarder. The experts who work with air freight every day can offer you personalized advice, based on your business—and what they’re seeing in the marketplace. They can also help you adjust your freight mix to meet your business goals and your budget.  

One More Air Freight Statistic, Just for Fun 

We’ll close out this data discussion with a quick pop quiz: 

Which U.S. airport handles 80% of all air cargo traffic between Asia and North America? 

The answer? It’s not HNL or any other West Coast airports including LAX or Sea-Tac. It’s Anchorage International Airport! Because of a little tweak in the Jones Act, international planes are allowed to stop in Anchorage and refuel before heading to an American airport. As a result, Anchorage handles approximately 80% of all air cargo traffic between Asia and North America.xv 

Need some help with your air cargo? Want to adjust your freight mix? One of our experts would be happy to help! Just get in touch with us for a free consultation. We’d be happy to take a look at your current operations and suggest a plan to optimize your supply chain for today’s markets. 

 

i https://www.globenewswire.com/en/news-release/2021/05/28/2238194/28124/en/Global-Air-Freight-Industry-Report-2021-Market-Revenues-of-107-895-2-Million-in-2020-Value-and-Volume-2016-2020-and-Forecast-to-2025.html

ii https://www.iata.org/en/iata-repository/publications/economic-reports/air-cargo-market-outlook/

iii https://centreforaviation.com/analysis/reports/air-cargo-more-virus-proof-than-air-passengers–but-not-enough-520283

iv https://www.iata.org/en/iata-repository/publications/economic-reports/air-freight-monthly-analysis—june-2021/

v https://www.iata.org/en/iata-repository/publications/economic-reports/air-freight-monthly-analysis—april-2021/

vi https://www.iata.org/en/iata-repository/publications/economic-reports/air-freight-monthly-analysis—june-2021/

vii https://www.iata.org/en/iata-repository/publications/economic-reports/air-freight-monthly-analysis—june-2021/

viii https://www.iata.org/en/iata-repository/publications/economic-reports/air-freight-monthly-analysis—june-2021/

ix https://airinsight.com/latin-american-cargo-airlines-problems/

x https://www.iata.org/en/iata-repository/publications/economic-reports/air-freight-monthly-analysis—june-2021/

xi https://www.iata.org/en/iata-repository/publications/economic-reports/air-freight-monthly-analysis—june-2021/

xii https://www.lloydsloadinglist.com/freight-directory/adviceandinsight/Global-freighter-capacity-%E2%80%98maxed-out%E2%80%99-for-this-year-and-next/79139.htm#.YQ3U-I5KiUk

xiii https://www.oag.com/coronavirus-airline-schedules-data ; https://www.oag.com/hs-fs/hubfs/Blog_Post_Images/2021/blog-post-020821/Table-1-Scheduled-Airline-Capacity-by-Region.png?width=601&name=Table-1-Scheduled-Airline-Capacity-by-Region.png

xiv https://www.sea-intelligence.com/press-room/84-schedule-reliability-continues-to-be-low-in-june-2021

xv https://theicct.org/blog/staff/one-weird-trick-improve-airline-efficiency-gain-belly-weight; ttps://airportimprovement.com/drupal781/index.php/anchorage-intl-airport-serves-pit-stop-global-cargo-carriers?q=article/anchorage-intl-airport-serves-pit-stop-global-cargo-carriers

 

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