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Shippers and forwarders learn to commit

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Increasing shipper and forwarder confidence in a more stable global air cargo market led to a higher commitment to longer-term freight contracts in September, said Clive Data Services in its latest report, published on 4 October.

A drop in capacity and traditional month-over-month seasonality pushed volumes up +6%, according to the weekly performance data from the airfreight arm of analyst, Xeneta.

The number of shippers committing to airfreight contracts of over six months in the third quarter 2023 rose to 34% from 28% in the previous three months, Xeneta says, as the industry comes to terms with a new baseline for the general air cargo market.

Chief airfreight officer at Xeneta, Niall van de Wouw, said: “This is not a peak season, it is a sign that airlines, freight forwarders, and shippers are finding more common ground to enter longer-term agreements. … The general air cargo market is entering a new phase where parties are not expecting the market to go much higher or much lower

“We see more longer-term contracts being signed and this only happens when people feel more comfortable about the now and the foreseeable future. It is easier to make a commitment now than when the market is on a sharp downward or upward trajectory.”

The global general air cargo spot rate edged up +2% month-over-month to US$ 2.23 per kg in September, with the growth especially accelerating towards the end of the month. This upward trend continued in the week ending 1 October 2023 as the average global air cargo spot rate rose +10% from three weeks ago.

September air cargo volumes were on par with the same period last year but global air cargo capacity, on the other hand, grew at its slowest pace in the past 11 months. It ticked up +5% from a year ago, but adjusted down slightly compared to a month ago as passenger belly capacity began to be gradually eased out of the market as summer travels in the Northern hemisphere cooled down.

As capacity demand and supply continued to rebalance, the global dynamic load factor, which measures cargo load factor based on both volume and weight perspectives of cargo flown and capacity available, grew to 58% in September, up 2% pts from a month ago. However, the load factor stayed below last year’s level by 2% pts.

Air cargo spot rates on most top trade corridors headed north in September. With cargo rushing out of China ahead of the Golden Week holidays from 1 October, the China to Europe cargo spot rate grew +11% from a month ago to $3.19 per kg in September. Similarly, China to US spot rate rose +9% to $3.63 per kg month-over-month.

Southeast Asia to Europe and to the US spot rates grew considerably, by +22% month-over-month (to $2.29 per kg) and +16% (to $3.14 per kg) respectively. Within the region, Vietnam spot rates to Europe and the US rocketed +54% and +32% to $3.00 per kg and $3.70 per kg respectively. These higher growth ratios are partially due to rates growing from a low base and, on these trades, returning air cargo spot rates to the pre-pandemic levels seen earlier this year.

In contrast, the transatlantic market continued to decline. The air cargo spot rate fell to $1.73 per kg in September, down -3% from a month ago.

The advanced economies remained weak in September. In the US, the Fed’s favourite inflation indicator, core Personal Consumption Expenditures (PCE) prices (excluding food and energy), rose only +0.1% month-over-month in August, the smallest growth since November 2020. However, the overall PCE ticked higher to +3.5% year-on-year in August, which is attributed to wage growth, rebound of commodity inflation, and surging crude oil prices. And it hints that the US economy remains overheated.

The Europe annual inflation rate cooled down to 5.2% in August, with the projected September ratio down further to 4.3%. The reading for the European manufacturing purchasing managers’ index in September of 43.4 continued to point to Europe zone manufacturing activities remaining in contraction.

Niall van de Wouw added: “The global air cargo market is still muted and has been flat at a global level now for three months in a row. September produced no surprises, with traditional seasonality pushing up demand over what we saw in August, and we would expect a similar trend in October with less capacity flying around.

“But in my conversations with shippers, forwarders, and airlines, I still hear very little hope of demand growth before Q3 2024 and for that to happen, we still need to see stronger consumer confidence and economic activity.”

Silk Way’s 777F takes to the skies

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Silk Way West Airlines has operated its inaugural Boeing 777F flight from Seattle to Baku, Azerbaijan. It is the first of seven similar aircraft that will be delivered over in the next seven years until 2030. It offers more payload and extended range, opening up new possibilities for connecting Baku with key global cargo hubs.

Sterling adds LA-Texas routes

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Airfreight trucker Sterling Transportation is expanding its LTL services to include lanes connecting Los Angeles to Dallas and Houston.

It has moved shipments to Florida from the West Coast for three decades and in the past few years, has added service from Texas into Florida and recently added westbound cargo from Florida into Texas.

Chief executive Keith Davis, said: “Dallas is becoming an important hub. In April we moved to a significantly bigger facility in that city with plans of expanding our services.”

Barlow to run risk management for Global Critical Logistics

Global Critical Logistics, whose brands include Rock-it Global, Dietl, Dynamic International, CARS, and Cosdel, has appointed Amanda Barlow as vice-president of risk management and business affairs. She was previously at Roanoke Insurance Group.

She will manage the group’s insurance and spearhead development of its global ATA Carnet programs. GCL group is the largest ATA Carnet user in the US. Rock-it Global was recently chosen by the US Council for International Business to pilot the digitized eATA Carnet program, which Barlow helped develop.

Barlow is also an Airforwarders Association director and chairs its Technology and Cybersecurity Committee and sits on the US Department of Commerce’s District Export Council of Southern California.

RKN wins American’s approval

DoKaSch Temperature Solutions has achieved technical approval for its Opticooler RKN active containers with American Airlines Cargo, in addition to the Opticooler RAP container which is already well established with the carrier. DoKaSch managing director, Andreas Seitz, said: “The US is one of the biggest and most important export market for pharmaceuticals. Approval by American Airlines Cargo is therefore an important step for our growth strategy in the region.”

Is this Turkish Airlines’ cutest cargo ever?

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Turkish Cargo has played a vital role in bringing koala bear Yani from Hong Kong to a new home in the UK.

She was born in Australia but brought to a Hong Kong zoo park, and was left alone after the other koalas she lived with at the park passed away.

However, she is now being rehomed at Longleat Safari Park.

After obtaining all the necessary permits for Yani’s transfer, a flight plan was developed from Hong Kong to the via Istanbul, all in accordance with IATA Live Animal Regulations. After arriving in the United Kingdom, Yani was placed in quarantine for a period and, following all health checks, was introduced to her new companions.

Saudia Cargo appoints MD

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Saudia Cargo has appointed Loay Mashabi as managing director. A former deputy minister for logistics services at the Ministry of Transportation and Logistics, he has worked in both the private and government sectors as well as a board member of Saudia Cargo.

British airport to be testbed for autonomous freight truck

UPS and automotive firm Aurrigo are collaborating in a project to deploy an autonomous electric vehicle designed to move heavy cargo loads to and from aircraft at the UPS hub at East Midlands Airport.

The Auto-Cargo,will be able transport a standard full-size cargo pallet or two half-size aviation industry standard containers or Unit Load Devices up to a totalof 7.5 tonnes and can tow a further fully loaded cargo trailer.

It will allow the limited numbers of security-cleared drivers to perform other roles around the airport, while also producing zero tail pipe emissions.

The programme is supported by matched funding from Innovate UK, the UK Government’s innovation agency, and CCAV. The two companies will develop and pilot Auto-Cargo at East Midlands Airport over a 14-month period.

Aurrigo chief executive, David Keene, said: “This vehicle allows an airfreight operator to help decarbonise and automate its ground operations for lower emissions and greater efficiency. By combining the tractor and trailer into one unit, we save space, which in a busy cargo hub like East Midlands Airport is vital to efficient loading and unloading of aircraft.’’

WebCargo wins Chapman Freeborn

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Following yesterday’s announcement that it had recruited transatlantic carrier Norse to its online platform, Freightos’ WebCargo has also recruited charter company Chapman Freeborn. The broker covers routes, such as Liège to Chicago, Dubai and Singapore, and organizes part-charters, backloads and other solutions for ad hoc, peak-season and project cargo.

It is a member of the Avia Solutions Group, the world’s largest ACMI air charter company with a fleet of 173 aircraft and 11,500 staff in 68 countries.

WebCargo to spearhead Norse invasion of US

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Transatlantic carrier Norse Atlantic Airways has signed a deal to offer its cargo capacity on the WebCargo by Freightos booking platform.

It will open up real-time booking for forwarders on its flights to and from Europe to seven destinations in the US.

Later this year, Norse plans to open capacity from London to Barbados and Jamaica, and from Oslo to Thailand, further expanding WebCargo’s footprint in Asia and the Caribbean.

The airline operates a fleet of Boeing 787 Dreamliners serving destinations including New York, Los Angeles, Orlando, Washington, San Francisco, Boston, Oslo, London, Berlin, Rome and Paris.

WebCargo chief executive, Manel Galindo, commented: “We’re excited to play a supporting role in Norse Atlantic’s growth as their primary air cargo digital sales platform.  It’s a win-win for all–the thousands of forwarders currently on WebCargo, who will benefit from the increased cargo capacity, and the speed and flexibility of WebCargo’s unparalleled platform has the power to boost Norse’s cargo sales and brand growth.”

Norse Atlantic head of cargo, Jennifer Bendelow, added: “Cargo will play an important role in the future of Norse. Partnering with WebCargo is a testament to our commitment to innovation and to delivering exceptional services to our customers.

 “Our Viking spirit of ingenuity, coupled with WebCargo’s platform, will extend our reach to key freight markets.”