New data from Xeneta shows airfreight returned to normal levels just nine days after the July 19 CrowdStrike Windows outage.
Thousands of flights were canceled at a time when airfreight demand is soaring, creating concern among logistics managers.
Wenwen Zhang, airfreight analyst at Xeneta, tells American Shipper that the cargo backlogs caused by the IT failure increased the cargo load factor (Xeneta’s measurement of available capacity against volume/weight of goods flown) of some airlines by up to 4 percentage points compared to the previous week. Cargo load factors mostly returned to pre-IT failure levels on July 28.
“Most flight cancellations were quickly reversed and air cargo once again showed resilience,” said Zhang. “This was helped in the fact there are currently more passenger flights due to summer travels, which provides more belly capacity.”
Xeneta data shows the cargo load factor for July increased by 5 percentage points year on year to reach 59%. Compared to low demand in July 2023, airlines are now seeing strong demand from e-commerce.
“The summer should be a quieter time of year for airfreight, but July saw the sixth consecutive month of general cargo spot rate increases,” said Zhang. “Shippers and freight forwarders have real concerns ahead of the traditional peak season later in the year because there is going to be a scramble to secure capacity, which means increasing rates.”
The increase in demand has throttled July spot prices by 13% year on year.
Xeneta data shows the global average air cargo spot rate for the last week of July reached its highest level of the year at $2.70 per kilogram. July marks the sixth consecutive month of growth.
“The increasing global demand for air cargo in 2024 is driven largely by the phenomenal rise of e-commerce from China,” said Zhang. “There is also the knock-on impact of disruption to ocean container services due to conflict in the Red Sea, which has seen some shippers turn to airfreight to protect supply chains.”
Global air cargo supply grew at a much lower pace of 2% year on year in July.
“Global air cargo supply chains are under huge pressure in 2024, with increasing demand far outstripping supply growth,” warned Zhang. “The last thing shippers needed was the global IT failure on July 19th, which saw thousands of flights delayed and canceled at major airports worldwide.”
Zhang added: “There is also a balancing act for carriers in managing different customer groups. They want to benefit from the huge volumes of goods being shipped by e-commerce giants like Temu and Shein. But they also have their wider customer base to think about – if there is limited capacity available later in the year, then who will they prioritize?”
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