In July, a global IT outage resulted in more than a week’s worth of flight delays and cancellations. This led to a significant cargo backlog and a short-term panic among shippers and forwarders. As a result, capacity prices surged to $2.70 per kilogram in the last week of July, marking the highest level for the year. However, the air cargo sector demonstrated its resilience, recovering quickly from the disruption. “In July, had the IT outage taken longer to fix, we might have seen a slightly different outcome,” said Niall van de Wouw, Chief Airfreight Officer at Xeneta.
Continued Growth in Air Cargo Activity
Despite the IT outage, air cargo demand increased by 13% year over year in July. This growth is largely driven by e-commerce volumes from Asia, with elevated demand expected to continue through September. Air cargo spot rates also increased for the sixth consecutive month in July, averaging $2.66 per kilogram, a 20% increase year over year.
Potential port strikes in the U.S. East and Gulf Coasts, as well as Hamburg, Germany, could further pressure rates ahead of the peak season. Ongoing disruptions in the Red Sea have also kept air freight spot rates high on certain trade lanes.
Preparations for Peak Season
With the peak season already underway as of July, shippers and freight forwarders are preparing for elevated Q4 demand. Companies like DHL Express and UPS are planning to implement peak season surcharges, while others are securing capacity to avoid constraints. “For the air cargo market, it’s now all eyes on late August for the first signs of a proper peak season,” said van de Wouw.
