The air cargo market has experienced a surprisingly strong start in 2024, with demand exceeding expectations and creating a positive outlook for the short term. This growth is attributed to several key factors:

• E-commerce surge: The ongoing e-commerce boom is driving significant air cargo volumes, particularly from Asia. This surge has largely offset any decline in traditional Chinese air exports.
• Red Sea crisis impact: Disruptions in Red Sea shipping due to security concerns are pushing cargo towards air freight, further boosting demand.
• Ocean-air resurgence: The rise in air cargo demand and longer ocean transit times due to the Suez Canal bypass are revitalizing ocean-air services, especially on Asia-Europe and Asia-North America routes.

Market Dynamics:

• Demand: Air cargo demand has grown by over 10% compared to Q1 2023 across all major trade lanes. E-commerce and the Red Sea crisis are the primary drivers.
• Capacity: While capacity has increased to meet demand, there are potential shortages in certain regions like India.
• Rates: Air cargo rates remain higher than pre-pandemic levels due to the favorable market conditions.

Looking Ahead:

• Short-term outlook: The positive momentum from Q1 is expected to continue into Q2, with stable demand and adequate capacity (except for potential regional shortages). This could lead to sustained higher prices than initially anticipated.
• Long-term uncertainty: The million-dollar question is how long this favorable market will last. If demand elements remain strong, securing capacity and price increases could become a challenge later in the year.

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