EXTRANS GLOBAL - Air Freight News - Week 03 2025

Air Cargo General  

1)  The supply expansion on the Asia-Europe route continues this year.

• Starting from the new year, new cargo routes between Asia and Europe are being opened. From January 8, MSC Air Cargo will operate the Amsterdam (AMS) and Incheon (ICN) route, utilizing five 'B777' freighters. Among these, four are operated by Atlas Air, and one by the recently merged Alis Cargo Airlines.

• This service may compete with Air Incheon, which includes routes between Incheon (ICN) and Brussels (BRU).

• DB Schenker has also begun operating three regular flights on the route between China’s Ezhou (EHU) and Frankfurt (FRA) through a partnership with Etihad Airways (EY) starting on the 8th, using '777F' aircraft.

• The flights depart from Ezhou (EUH) every Tuesday, stopping in Abu Dhabi (AUH), and are chartered to accommodate e-commerce and HI-TECH cargo, estimated to handle about 5,200 tons annually.

• Additionally, Ezhou Huahu International Airport (EHU) is emerging as a cargo transportation hub, boasting 30 international cargo routes and 53 domestic routes. Last year, it recorded the fastest growth rate in China, ranking fifth with a cargo throughput of 1.2 million tons.

• Located 75 km from Wuhan, it is within 1.5 hours of flight distance to five national-level city clusters, including the Yangtze River Delta and Pearl River Delta regions.

• Maersk Air Cargo has also started operating six weekly flights between Zhengzhou (CGO) in China and Billund (BLL) in Denmark, using 'B767' freighters primarily for e-commerce and electronics transportation.

• Lastly, although unrelated to the routes, Air Atlanta Icelandic is set to acquire a 747F cargo aircraft from China Airlines Cargo, which will be operated for Network Aviation Group.

2)  This year's air cargo market is generally optimistic.

• Last year, the air cargo market continued to grow as a counterbalance to supply chain disruptions in international maritime transport. According to the International Air Transport Association (IATA) in its "Cargo Operations - 2025 Strategic Priorities Report" released last month, global air cargo demand (measured in CTK) increased by 13.4% in the first half of last year compared to the same period the previous year, with supply growing by 15.6%.

• The key factor behind this increase in air cargo demand is e-commerce volumes. The association reported that sales of e-commerce goods grew by 10-12% compared to the previous year. Consequently, the global e-commerce market size last year is expected to have reached $6.3 trillion, with over 80% of cross-border e-commerce goods currently relying on air transport.

• Last year, global merchandise trade volume was up 2.7% compared to the previous year, with a projected growth of 3% this year, slightly exceeding the global real GDP growth rate.

• Global e-commerce retail sales were analyzed to have grown by 21.2% last year, reaching $6.33 trillion. This year, growth is expected to be 22.2%, maintaining a forecast of 23.3% by 2026.

• The actual parcel volumes generated by e-commerce also quadrupled to 170 billion parcels in 2022 compared to 2014. By 2023, parcel volume is projected to reach 189 billion.

• By 2027, this parcel volume is expected to reach 256 billion, a 50% increase compared to 2022. The IATA emphasizes that the aviation industry must proactively respond to this expanding air demand.

3)  Bangladesh, Dhaka Air Cargo Rates – Sharp Decline Following Decreased Demand After Year-End Holidays    

• Air cargo rates are generally declining as the holiday season ends and cargo volumes decrease, but in some routes, rates are falling more rapidly.
• Air freight rates from Dhaka, Bangladesh, to the US and Europe have nearly halved over the past month. The spot rate for cargo from Bangladesh to Europe has dropped from about €7.00 per kg two months ago to currently €3.40–4.00 per kg.
• Cargo transport capacity from Dhaka, Bangladesh, decreased by 2.8% compared to last month, but it has still increased by about 15% compared to December of last year.
• Freight rates to the US are currently $5.57 per kg, down from $10 two months ago, with daily demand from Dhaka at around 500–600 tons.
• Nasir Ahmed Khan, Vice President of the Bangladesh Freight Forwarders Association (BAFFA), stated, "Rates have decreased as demand for major export destinations has declined. Most of the winter season orders have already been shipped, and Christmas-related holidays are still ongoing at major destinations."
• He added that air cargo rates vary depending on airline capacity and cargo demand, noting that many offices in Europe and the US are still closed, leading to decreased demand and consequently lower rates. Additionally, rates can vary based on cargo size, with lower rates potentially applied to shippers transporting bulk cargo.
• Despite increasing competition in India's clothing market, Bangladesh's clothing exports rose by 6.23% from January to November last year, totaling $37.71 billion.
• Anwar Hossain, Vice President of the Export Promotion Bureau, stated, "Bangladesh's exports are increasing every month and showing significant growth," and noted that total exports from July to December 2024 have increased by 12.84% compared to the same period in 2023.

4) Expansion of Air Cargo Demand in South America Due to Rapid Growth of E-Commerce and Infrastructure Development

• The air cargo market in South America is rapidly growing due to a surge in e-commerce demand and the proactive expansion of infrastructure by major airports and logistics companies.
• Changes in key markets such as Brazil and Uruguay are notable. Global forwarders and logistics sectors in the Far East are paying attention to this trend.
• Rio de Janeiro's Galeão International Airport (RIOgaleao) is preparing for the entry of a global e-commerce giant early next year, with a warehouse planned to cover 1,000 square meters.
• Renovations of nearby warehouses are also underway to accommodate additional demand.
• Carrasco International Airport (LACC) in Montevideo, Uruguay, faced significant challenges earlier this year due to the entry of the Temu platform, which led to a much larger-than-expected increase in volume. However, they are strengthening infrastructure through cooperation with e-commerce platforms and plan to start a project to convert the old passenger terminal into cargo facilities early next year.
• Airlines are also responding to this situation. With increasing e-commerce and air cargo demand, major airlines such as Qatar Airways, Martinair, and CargoLux are reallocating cargo aircraft to the Asian market.
• As a result, local airlines like LATAM Cargo are meeting demand within South America and filling the gaps.
• LATAM Cargo has designated Brussels as a European hub and operates 12 cargo flights per week, expanding its market share.
• Turkish Airlines has opened a new route connecting Istanbul to Miami and strengthening cooperation with Avianca.
• The South American cargo market is seeing stable demand not only from e-commerce but also from pharmaceuticals, automotive parts, and agricultural products.
• Carrasco International Airport (LACC) in Montevideo is growing as a logistics hub supplying vaccines to Brazil and Chile in partnership with GSK, while Rio de Janeiro's Galeão International Airport (RIOgaleao) has seen a 21% increase in aircraft engine and parts volume due to GE Aerospace's maintenance facilities.
• Global forwarders are taking note of the rapid growth in the South American market and are hastening local investments. Freight rate increases, surging e-commerce demand, and the effectiveness of existing logistics services for pharmaceuticals and agricultural products are expected to yield results.
• The Central and South American market has now established itself as a source of new growth drivers, surpassing mere growth potential. Just as in the past with the Vietnamese and Indian markets, forwarders are now at a point where they need to formulate more proactive strategies.

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