Vietnam Emerges as a Key Player in Air Cargo Market as Spot Rates Reach 2024 Highs
Air cargo spot rates have surged to their highest point of the year, even in the wake of the recent Golden Week holiday in China. According to WorldACD, tonnages from the Asia Pacific region dropped by 7% week-on-week as of October 6. However, global spot rates increased by 1%, reaching $2.84 per kilogram, marking a significant peak for 2024.
In detail, rates from the Asia Pacific region climbed by 1%, while Africa saw a 2% increase, and Central and South America experienced a 5% rise. Notably, contract rates from the Asia Pacific also rose by 2%.
Vietnam has emerged as a notable hotspot in this dynamic market, attracting the attention of major carriers. A representative from Qatar Airways Cargo stated to The Loadstar, "We have certainly observed a substantial demand for e-commerce from Asia and have recently boosted our capacity in markets such as India, China, and Vietnam. The potential in these regions, particularly with the ongoing e-commerce boom, is immense."
Lufthansa Cargo has also recognized Vietnam's growing significance, incorporating it into their winter schedule with a new weekly flight connecting Frankfurt, Ho Chi Minh City, and Los Angeles using a 777F aircraft. The carrier expressed enthusiasm about this new route, highlighting it as their first direct link from the Asian market to their US network, which opens up exciting opportunities for global trade and logistics.
The attention on Vietnam is well-deserved, as data from Rotate’s capacity database indicates that capacity from Ho Chi Minh City to North America saw a staggering 359% increase year-on-year last week, while the tradelane experienced an 86% growth last month. However, it is important to note that year-to-date capacity is down by 22.1% compared to 2023.
In contrast, capacity from Ho Chi Minh City to Europe rose by 30% last week compared to 2023, with an 11% increase year-to-date.
Despite the increase in capacity, rates continue to climb. For the week ending October 7, rates from Vietnam to the US surged by 65.4% year-on-year, reaching $6.38, and increased by 3.2% week-on-week. Meanwhile, rates to Europe rose to $4.44, reflecting a week-on-week increase of 3.3% and a year-on-year rise of 57.5%.
The spokesperson for Qatar Airways Cargo remarked, "Profitable and high-demand routes are always central to our business strategy. We are witnessing a positive trend in bookings for the remainder of the year. However, due to commercial sensitivities, we are unable to disclose specific figures."