The air cargo market continues to lose ground in the face of the general economic downturn and supply chain disruptions. Whether rapidly changing conditions allow airline cargo business to return to positive territory this summer is an open question.

Air cargo volumes fell 8% in May compared to 2021, replicating the fall in April, as the war in Ukraine, large-scale COVID lockdowns in China, soaring inflation and High interest rates have slowed global production and consumption, according to figures released Wednesday by Clive Data Services.

Demand for air freight services was also 8% lower than in May 2019, before the pandemic, the air intelligence arm of benchmarking and freight rate analysis firm Xeneta reported. Meanwhile, available capacity has increased by 4% compared to the previous year, but still remains in deficit by 12% compared to 2019. The evolution of supply and demand has led to significantly lower utilization aircraft, with the average load factor dropping 9 points to 60%.

Reduced competition for shipping space has resulted in lower rates, although they are still quite high by historical standards. Rates in May were still 16% higher than 2021 and 134% higher than 2019, but about 10 points lower than in April.

Some of the biggest changes have been in the North Atlantic market, where passenger airlines have quickly reintroduced passenger services for the summer season in response to fewer travel restrictions and strong bookings. The large number of jumbo jets that could carry people and cargo added a large amount of capacity in a short time. May capacity was 82% higher than 2021, compared to 44% in March.

Over the past eight weeks, load factors on the Europe-North America trade lane have plunged to 64% from 82% in March. May’s dynamic load factor – the amount of cubic capacity filled by cargo – was also 22 points lower than a year ago, compared to March when the drop was just 7 points. During the last week of May, fares from Europe to North America actually recorded negative year-over-year growth for the first time in two years, Clive Data Services said.

High fuel costs passed on to customers are one of the reasons analysts say fares have not come down further.

“It’s interesting to follow the Atlantic market to see how rates move in the coming months, as it could be an indicator of how other markets move when passenger flight capacity returns to its previous level and beyond. “said Niall van de Wouw. , founder of Clive and now Director of Airfreight at Xeneta.

Weaker consumer spending, shifting spending towards services and lower export orders could result in a weaker peak season and less air cargo demand this fall than many had previously anticipated. . Another possibility, logistics experts say, is a major rebound in demand during the traditionally slower summer period due to the unleashing of delayed factory production on the market as China reopens from the strict lockdown period. . Many airlines are anticipating an increase in cargo demand as businesses race to make up for lost time getting goods to market.

And more business could come their way if West Coast dockworkers lead work slowdowns to influence negotiations with maritime employers over a new contract. The International Longshore and Warehouse Union’s current contract expires on July 1 and little progress has been reported so far. Shippers have already re-routed some cargo to other ports to avoid potential delays and may convert more cargo to air as the deadline approaches.

Click here for more FreightWaves/American Shipper stories by Eric Kulisch.

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