AIR FREIGHT

Air cargo revenue tumbles for the US majors, but they eye a strong Q4

• Major US airlines have experienced a decline in air cargo revenue, although they remain optimistic about a strong fourth quarter. American Airlines, Delta Air Lines, and United Airlines all reported decreases in cargo revenue for Q3 compared to the previous year. However, the airline executives are positive about the outlook for the fourth quarter. They highlight the growth in certain sectors such as e-commerce, automotive, and pharmaceuticals, which has contributed to strong revenue performance. Additionally, the airlines emphasize the increase in cargo ton miles and the stabilization of yields in some areas and hopeful for a robust performance in the coming months.

• Besides, China's air cargo industry is demonstrating resilience as well. Various stakeholders, including airlines, airports are taking proactive measures to expand their freighter fleets, establish new routes, enhance infrastructure, and improve operational efficiency. SF Airlines, the largest cargo airline in China, is expanding its fleet to 86 freighters to become a world-class carrier. China's civil air transport has seen positive recovery with increased transport turnover and air cargo volume. The Ezhou Huahu Airport, China's first cargo-focused airport, has experienced significant growth.​

The overall rise was again led by firmer prices out of China with the index of outbound routes from Hong Kong gaining a further 2.7% WoW and from Shanghai, up even more strongly by 4.1% WoW

Source: The Load Star, Xinhua, stattimes

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OCEAN FREIGHT​

Retailers pivot in fast-moving trans-Pacific as carriers accelerate blank sailings

• Facing the prospects of low-single-digit volume growth through the Lunar New Year in February, carriers so far this month have effectively reduced almost 22% of trans-Pacific capacity through blank sailings. That’s up from 11.5% in September and 13.1% in August. Container lines have so far announced capacity cuts of 6.4% in November and 1.7% in December, those numbers are expected to increase significantly in the coming weeks as more blanks are announced. THE Alliance announced to suspend two East - West loops. One of these is the Asia – Europe loop ‘FE5’ and the other is the transpacific service ‘EC4’. Overall, capacity measure will make a total of 22 neo-panamax ships redundant.

• Market shows slower demand for container shipping. According to the National Retail Federation, the inventory-to-sales ratios in the U.S. for retail trade are back to the pre-pandemic levels. Retailers have been working to destock throughout the year, resulting in leaner operations and improved inventory flow. The NRF CEO believes that the industry is well-positioned for the post-holiday season and future selling seasons.

Carriers accelerate trans-Pacific blank sailings in October

(Data as of Oct 24, 2023)

Inventory-to-sales ratios for retail trade

​(excluding motor vehicle and parts dealers)

Source: Alphaliner#43, JOC, retaildive

Month-Over-Month Blank Sailings Trend

(Data as of Oct 27, 2023)

Source: Drewry