In 2024, the air freight sector has experienced an unusually early and sustained peak season, breaking from the traditional timeframe of early autumn to the Chinese New Year. This prolonged demand has been driven by heightened e-commerce orders from Asia and diversions caused by disruptions in the Red Sea.
Market Overview
Recent industry data indicates strong double-digit growth in demand, fuelled by ongoing supply chain challenges and a shift from ocean to air cargo. The International Air Transport Association (IATA) reports a 12% increase in air cargo yields compared to 2023, showcasing the sector’s resilience amid logistical challenges. With peak season pressures in full swing, shippers should plan for potentially higher rates and longer lead times, as strong demand is expected to continue through year-end.
Geopolitical events and regional disruptions, notably the ongoing Red Sea conflict, have notably impacted the air freight industry this year, leading to intermittent disruptions in capacity and pricing. Despite these challenges, demand for faster shipping alternatives has benefitted the market, the growth in volume and rates we have seen have been driven by seasonal demand peaks such as Golden Week and the Christmas season.
Significance of E-Commerce
The sustained demand for air freight in 2024 can largely be attributed to the surge in e-commerce orders from Asia. Experts suggest this increase is due to retailers ramping up imports to meet heightened consumer demand. Some retailers also delayed earlier stockpiling in anticipation of more definitive signals about future demand, thus driving the need for expedited air shipments to fill the gap. This shift underscores the growing reliance on air freight as a key solution to meet the pressures of the e-commerce market.
Current Regional Considerations
China
As the holiday season approaches, China’s air freight market has entered a robust peak phase, especially driven by a surge in e-commerce demand. The volume of goods moving through the airfreight channels is significantly higher than in previous years, creating fierce competition for cargo space. Rates are reaching new highs, particularly from Southern China, where capacity constraints and increased demand are pushing costs up sharply.
Hong Kong
To help mitigate rising costs from China, we are offering weekly space on our contracted flights from Hong Kong to Stansted. This route currently presents a cost-effective alternative, providing reliable capacity at more competitive rates than mainland China, especially advantageous during the peak season. We recommend clients consider Hong Kong’s space availability as a viable option to keep their supply chains efficient and cost-effective.
Indian Subcontinent
Air freight volumes from the Indian Subcontinent have remained stable, with rates also holding steady. However, we anticipate a potential uptick in demand in the coming weeks as shippers prepare for last-minute holiday orders. While volumes and rates have seen slight increases due to stable economic conditions in the region, current availability remains sufficient. Businesses shipping from this area should plan ahead to secure consistent rates, as demand could increase into December.
UK Airport Situation
Currently, both Heathrow and Stansted airports are maintaining their standard quick turnaround times. However, with the final holiday rush still underway, we anticipate potential congestion that could lead to delays or longer processing times through the end of December. We are closely monitoring the situation and will keep clients informed of any service disruptions that may affect turnaround and delivery schedules. To avoid last-minute complications, it is advisable to allow for some flexibility in planning.
Ensuring Timely Deliveries for Christmas
With the ongoing disruptions in the Red Sea region, more businesses are turning to air freight as a reliable solution to avoid delays and bypass the challenges currently plaguing sea freight routes. Air freight offers much faster transit times, providing a crucial advantage for companies with urgent shipping requirements and those seeking to maintain consistent delivery schedules despite issues in ocean transport. This shift highlights air freight’s unique ability to keep supply chains moving efficiently and meet time-sensitive demands in a way that sea freight simply cannot, especially during periods of regional instability and detours that increase transit times. For shippers, air freight is proving to be an effective way to ensure timely deliveries in today’s unpredictable logistics landscape.
Market Outlook
Overall, the market outlook for 2025 is cautiously optimistic, with expected growth in key regions. However, it will face both challenges and opportunities as it continues to evolve in response to shifting global trade patterns and technological advancements. While demand for air cargo is projected to remain robust, driven by ongoing growth in e-commerce and the increasing reliance on just-in-time delivery models, the industry will likely grapple with capacity constraints and rising operational costs. The sector will also need to navigate geopolitical uncertainties and potential disruptions, such as trade tensions or natural disasters, which could affect global supply chains.
How PFE Can Help
Amid the challenges in global logistics, PFE offers expertise in navigating complexities through efficient air freight services. Our solution-driven approach allows us to quickly deploy strategies that adapt to volatile conditions. Leveraging our extensive network, we streamline shipments to ensure reliable and timely delivery. With continuous monitoring of the evolving market, we provide tailored solutions that meet urgent shipping needs and critical deadlines, helping you maintain smooth operations and stay competitive in a demanding environment.
If you think we can offer a solution to help, or if you would like a quote, please contact our Air Freight department on 01753 278020.
