Market update

Freight Market Update: December 9, 2024

Shared by Elizabeth • December 09, 2024

AIR FREIGHT

Cathay cargo carried up 14% in Oct on Expert, Priority demand

Cathay Pacific's October 2024 cargo performance showed strong growth, with tonnage rising 14.3% to 142,323 tonnes and revenue tonne kilometres increasing 9.8%. The cargo load factor reached 61.5%, up 0.8 percentage points. For the first 10 months of 2024, tonnage growth outpaced revenue and available tonne kilometres, indicating improving market conditions.

“For cargo, the robust demand we have been seeing is expected to continue throughout the rest of the peak season, driven by e-commerce, high-tech and electronic goods from the Chinese Mainland, Southeast Asia, as well as perishables from South West Pacific and the Americas,” said Cathay Pacific’s spokesperson.

Aggressive growth is likely to continue for e-commerce cargo volumes, according to a survey. Demand growth in 2025 will likely be limited by available capacity. Policy and security are perceived as key risks to growth with increasing imbalances leading to operational issues. If e-commerce growth continues at +20 percent and general cargo grows at +two percent, 2025 air cargo growth would be +seven percent, the survey report added.

Source: Cathay Pacific, Stattimes-1, Stattimes-2_________________________________________

US-only supply chains will emerge under Trump: PIIE economist

With Trump's presidency plans for tariffs prompted shippers to revise trade strategies, companies like Steve Madden, Yeti, and Traeger adjusted their China sourcing to lower costs.

The Trump administration is focused on increasing reshoring to the U.S, meaning a decrease in the flow of goods in and out of the US. Both international and domestic freight rates are expected to spike given an increase in volume, per a consultant. S&P Global Market Intelligence said Trump’s economic and international policies could bring another round of restructuring to global supply chains. This shift in supply chain dynamics could lead to changes in trade deficit figures between the U.S. and various countries involved in reshoring efforts.

The U.S. trade deficit with mainland China stood at $287 billion in the 12-month period through Sept. 30, 2024, down by 18.7% since 2021 but is still the largest individual deficit with any country. There has been a rise in Chinese manufacturing moving to Mexico under terms of the Trump-negotiated USMCA trade deal, which Trump is expected to take a new look at in his second term. More companies have also set up shop in countries such as South Korea, Vietnam and Malaysia, which could also face tariff actions. Through September, Vietnam’s trade deficit with the U.S. was up 30.6% in the previous 12 months compared with the 2021 level.

Ocean container rates surged over 70% in 2018 following Trump's tariffs on Chinese imports, significantly altering the global shipping landscape.