Logistics Air cargo demand rises after Red Sea shipping disruption By Sarah Townsend February 4, 2024, 7:25 AM Emirates SkyCargo Emirates SkyCargo carried 16% more freight, on the back of strong Chinese ecommerce traffic and a rise in Dubai-bound shipments 18.3% growth in December Demand highest in two years A ‘vital option’ for some cargo Middle East airlines posted an 18.3 percent annual increase in air cargo demand in December, in line with strong global growth attributed to Red Sea disruption. Global demand for air cargo was up 10.8 percent compared with December 2022 – the strongest performance in two years, according to the International Air Transport Association (IATA). The Middle East recorded the second-highest increase of all regions behind Asia-Pacific, where demand grew 18.5 percent. Red Sea crisis ‘will push up Middle East consumer prices’ Cost of Red Sea shipping insurance rises 2,700% Red Sea attacks could harm more than ports and shipping “The recent disruption to maritime routes in the Red Sea has seen some shippers pivot to air cargo,” said IATA director-general Willie Walsh. “The increased demand saw a spike in air cargo yields on related trade lanes. “A similar spike is expected in January as disruptions intensified.” However, full-year global demand was down 1.9 percent, and regional carriers told AGBI demand has risen over the year regardless of supply chain issues. In November, Houthi rebels in Yemen began attacking commercial ships in what they claim is a show of support for Palestinians in the Israel-Hamas war. Many vessels are rerouting around Africa’s Cape of Good Hope, adding extra journey miles and fuel costs to their operations. IATA said air cargo has experienced a “modest rise in demand” and yields as companies seek alternatives to sailing through the Red Sea. Around 12 percent of global trade passes through the region. Between November 4 and December 9, 2023, IATA recorded a 1 percent rise in global air cargo demand and a 5 percent increase in yields. “While not all cargo is suitable for air transport, it is a vital option for some of the most urgent shipments in extraordinary circumstances – and this is critical to the continuity of the global economy,” Walsh said. A spokesperson for Etihad Cargo said: “We have seen a significant increase in demand and enquiries for air cargo capacity, primarily from freight forwarders, manufacturers and retailers for routes out of Asia.” However, there has been no notable shift in goods traditionally shipped by sea, “suggesting that growth is more closely related to e-commerce buying patterns and the need for fast delivery, rather than rising shipping rates or supply chain disruptions”. Emirates SkyCargo in November posted an 11 percent rise in freight volumes in the first half of last year. John Grant, partner at UK consultancy Midas Aviation, said the rise may be a short-term effect, as air cargo tends to be for small, high-value consignments such as perishables, microchips and pharmaceuticals, and “the price of moving any goods by cargo is considerably more than by sea – anything up to and higher than double”.