June 19, 2020: After the extreme Covid-19 impact on air cargo volumes in the month of April, the provisional May results look a bit different, as per WorldACD Market Data. Worldwide chargeable weight carried by air, decreased 29 percent compared with May 2019 year-over-year (YoY). As the final YoY figure for the month of April was a decrease of 34 percent, the conclusion may be that May showed a slight improvement. The improvement was also visible month-over-month (MoM), as May showed an increase over April of 11 percent.

In terms of yields/rates, we had witnessed a completely uncommon 63 percent MoM-increase in April, when a good part of cargo capacity suddenly ‘disappeared’ as passenger aircraft stopped being operated. The MoM increase in May was 5 percent. In other words, worldwide yields/rates still went up, from $3.74 to $3.95, in spite of additional capacity coming to the market by an increasing number of passenger aircraft being (partly) converted into freighters.

Although this small recovery does not promise a full rebound any time soon, in a number of markets some guarded optimism may be justified.

The market origin Middle East and South Asia (MESA) had suffered most in April (-70 percent YoY), but came back strongest in May (+45 percent MoM). The other origin regions showed a MoM increase varying from 4 percent (North America) to 14 percent (Central and South America). The origin Africa showed the largest increase in dollar yields/rates (+13 percent MoM) whilst changes in other regions hovered between -10 percent (Europe and North America) and +12 percent (Asia Pacific and MESA).

The market from China-East to Germany benefited most from the recent, very drastic market changes: although it slightly decreased in volume MoM, its YoY increase topped 60 percent both in April and in May. Its performance for the year-to-date (January – May) was +24 percent. Other top markets that performed much better than average in the year-to-date, include Hong Kong – US Pacific (+16 percent) and China East - US Midwest (+29 percent). The top markets that suffered most so far this year, were Kenya-Netherlands (-28 percent) and Germany-China East (-24 percent).

In the different product categories, the most unexpected development was a 1 percent YoY decrease in pharmaceuticals & temperature-controlled goods, the first such decrease for this category in 2020. The larger perishable categories outperformed the market as a whole in MoM growth: Fruits & vegetables +16 percent and fish & seafood +26 percent.

Looking at what happened within the month of May, the most striking features were:

  • The continuous weekly drop of worldwide dollar yields/rates: from percent $4.29 in the first days to an average of $3.52 for the last week
  • The daily pattern recovering from the steady drops shown in April.

The much-reported increase in passenger aircraft being transformed into ‘quasi-freighters’ was clearly visible in the strong load factor jump in passenger aircraft. Within the month of May, we also noted a drop in the market share of the freighter companies between the first full week of May and the last one, another sign that the conversions started to have some impact.