December demand in the general air cargo market put a final dampener on 2021 peak season volumes with a -5.0 per cent fall in chargeable weight in the final month of the year according to CLIVE Data Services.
Ongoing supply chain issues, congestion on the ground, and concerns over the new Omicron COVID-19 variant overwhelmed any end-of-year uptick, according to the industry data analytics company.
CLIVE’s latest weekly market intelligence shows a -5.0 per cent fall in chargeable weight in December 2021, compared to the pre-Covid level of December 2019. This made it one of the weaker months of the year in comparison to 2019 and in comparison to December 2020, volumes rose by +1.0 per cent.
CLIVE highlights that in order to provide a meaningful assessment of the air cargo market it continues to measure performance to both the pre-covid 2019 level, as well as giving 2020 year-over-year comparisons.
The Q4 2021 data reflects CLIVE’s statement earlier in the year that issues facing the air cargo market were driven by supply chain challenges, and less so by soaring volumes, it says.
In October, CLIVE’s ‘dynamic load factor – which measures both the volume and weight perspectives of cargo flown and capacity available to produce a true indicator of airline performance – reported a lower load factor for the time of year than expected, followed in November by a -1.2 per cent drop in volumes.
Cargo capacity has remained slow to return to the pre-Covid levels and in December 2021, it remained at -12 per cent to December 2019. The ‘dynamic load factor for this December of 65 per cent was +2.0 percentage pts up versus two years ago, CLIVE notes.
The big growth curve in Q4 of 2021 was in airfreight rates, which in December climbed at a global level to 168 per cent ahead of December 2019 (+42 per cent versus December 2020), following earlier monthly gains compared to 2019 of 155 per cent and 159 per cent in October and November 2021 respectively.
“It was certainly more complex to ship goods from A to B in 2021 by all modes of transport, which has continued to increase rates,” says Niall van de Wouw, CLIVE’s managing director. “In the general air cargo market, we’ve seen airlines focus more on managing margins than on filling aircraft.”
From a volume perspective, compared to 2019, November and December did not produce “the peak of all peaks”, he adds.
“The capacity and ‘dynamic load factor trends were more or less in line with earlier months, but rates kept on climbing. So, what is at play here?”
Van de Wouw says this latest December data “amplifies what we saw in November, with issues on the ground impacting the efficiency of the value chain. The rapid increase on Omicron and its impact on staff availability, hard lockdowns and their impact on business and consumer confidence are likely at play here.”
He adds: “Looking at 2021 overall, after a very strong start to the year and pretty solid middle months, we witnessed a not-so-strong ending of the year. The wear and tear of close to 20 months of Covid started to really impact the efficiency
of the value chain towards the end of 2021, and there are still no fundamental changes expected in the short-term that would change the current dynamics of supply chain shortages and elevated rates.”