- Airfreight rates from China to the U.S. have soared since mid-October, increasing nearly 58% between Oct. 12 and Dec. 21 to reach $8.02 per kilogram, according to the latest figures from the TAC Index.
- Demand for air cargo was down in October, though, with volume down more than 6% YoY for the month, according to the International Air Transport Association's monthly report.
- The ongoing distribution of coronavirus vaccines could increase annual air cargo demand by 2% and lift airfreight rates in the first half of next year, according to a research note from HSBC released this month.
The loss of capacity from parked passenger airlines is still one of the factors preventing faster recovery in airfreight volume, according to IATA. Airfreight capacity was down almost 23% YoY in October. This continues to benefit freighter airlines — as it has throughout 2020.
"We expect volumes and yields in the fourth quarter to be driven by continued e-commerce growth and year-end airfreight demand, coupled with the ongoing reduction of passenger belly capacity in the market," Atlas Air CEO John Dietrich said on the company's earning's call last month.
The lack of capacity means some shippers can't get all the room they need.
TAC Index Managing Director John Peyton Burnett said in an email this month that he is "hearing on the market that some shippers are having their capacity capped by airlines. This is probably due to the reduction of [passenger] belly capacity in the market. Also, ocean is a mess."
Atlas Air Chief Financial Officer Spencer Schwartz noted on the earnings call that the vaccine rollout will "have quite an impact in airfreight."
"There are continued capacity constraints, and we really don't see those changing for quite some time," Schwartz said, adding that low output by airplane manufacturers will dampen airfreight supply for the foreseeable future.
But the demand for airfreight is expected to reach pre-pandemic levels before the demand for passenger space, according to Brie Carere, FedEx chief marketing and communications officer.
"Our goal is to profitably take market share and keep it beyond the capacity shortage internationally," Carere said on the company's earning's call last week.
But FedEx doesn't expect demand to return to pre-pandemic levels for another 18 to 24 months as the global rollout the coronavirus vaccine takes place, FedEx Express CEO Don Colleran said.