Capacity constraints and rate volatility strain key routes
Most destinations outside of Asia are challenged when freighter aircraft are required, just not to the extent that Latin America has been impacted. If your cargo can fly on a passenger flight, the market is relatively stable globally.
Asia
Demand in November 2024 is expected to surpass October 2024 due to the peak season. With stronger demand to the EU compared to the United States, Southeast Asia’s demand is likely to remain strong or even exceed North Asia. However, the post-U.S. election environment and trade tariffs with China may trigger a rush for air freight exports from late November to the end of the year.
Airlines are not adding many passenger flights from Asia to the United States and Europe. Cargo freighters are increasingly tied up with ecommerce shipments, and charters for project cargo are expected to rise. The ongoing strike at a major aircraft manufacturer is delaying new aircraft deliveries. Consequently, we expect upward pressure on rates in November 2024 due to capacity constraints coupled with rising demand.
Europe
Major hubs like Frankfurt, Amsterdam, and Paris are experiencing congestion, impacting schedule reliability.
To navigate these challenges, consider using less congested European airports like Brussels or Leipzig, which may offer more reliable schedules and faster processing times. Flexible routing through secondary U.S. airports such as Atlanta or Dallas might also provide better capacity and fewer delays compared to major hubs like JFK or LAX.
LATAM
As we approach peak season with events like the new iPhone launch, Black Friday, and Christmas, São Paulo/Guarulhos (GRU) cargo is experiencing delays in release times and gate operations, varying with demand. GRU Airport will suspend dry cargo receiving from November 7 to November 11, impacting operations significantly. Customers are encouraged to pick up their cargo during weekends and holidays to mitigate delays.
Viracopos/Campinas International Airport (VCP), the main alternative to GRU, is also struggling with increased volumes but offers bonded truck services to/from GRU, providing better gate availability and cargo release agility.
United States and Mexico destinations are facing challenges due to aircraft downgrades shifted to the Asia market and the migration of urgent ocean shipments delayed by port congestion and vessel delays, with space availability 12 to 15 days out. South America has flat space and is open to negotiation, especially for services with connections.
The Europe trade, having passed through the fruit peak season, is also open to negotiation, while Asia and Oceania remain flat and stable.
North America
The biggest challenge for U.S. exports is the South American market. Airlines are shifting freighter capacity to Asia due to strong demand and high yields, leaving other markets struggling for capacity. Strong air demand from Europe and Asia into South America relies on Miami as a transshipment point, causing extreme backlogs (two weeks or more) and higher rates. No relief is expected in the short term, so advanced planning is crucial to mitigate long transit times.
For other destinations, the market is relatively stable when cargo flies on passenger flights. Outside of China, where freighter capacity is abundant, cargo needing freighter aircraft faces slightly longer transit times and higher rates.
Oceania
The region is experiencing a surge in demand driven by ecommerce and high-value goods, like technology and pharmaceuticals. Australia and New Zealand are showing smooth operations and stable capacity.
Fiji and Papua New Guinea are emerging as crucial hubs, though they face occasional capacity constraints due to limited infrastructure. Smaller Pacific Islands often struggle with low capacity or no capacity for direct air freight, necessitating transshipment through larger hubs.
Pricing considerations are crucial in this dynamic market. Rates are on the rise due to high demand and limited capacity, especially during peak season. Fuel surcharges and geopolitical factors are also contributing to fluctuating costs.