Cargo rates hold as Golden Week cuts tonnage and Gulf capacity

By James Calloway

Worldwide air cargo spot rates held at US$3.55 per kilogram in week 41 as global chargeable weight fell 1% week on week for a third consecutive week.

WorldACD Market Data reported the decline for the week ending 11 October, the second week of October. Global tonnage nevertheless remained 9% higher than a year earlier. The market lost momentum without losing its year-on-year volume base.

Average worldwide full-market rates, combining spot and contract shipments, were US$3.13 per kilogram. Spot rates stood 34% above a year earlier. Full-market rates were 29% higher. Those are market-wide averages, not guaranteed shipper prices.

That distinction matters because WorldACD said actual pricing varies by trade lane, service type and contract terms. Stable headline rates coexisted with fuel surcharges, constrained capacity and geopolitical disruption. The averages did not describe a normalized operating environment.

The holiday pullback

China’s Golden Week holiday principally drove the latest weekly decline. National holidays in Taiwan and South Korea added to the seasonal slowdown. Asia-Pacific origin tonnage fell 1% week on week after declines in each of the preceding two weeks.

Combined Asia-Pacific volumes in weeks 40 and 41 were 7% below the previous two-week period. WorldACD does not regard the holiday pattern as unusual. The question is whether the subsequent capacity recovery arrives without further disruption.

Regional spot-rate moves were uneven:

• Asia-Pacific: Rates fell 3% week on week to US$4.83 per kilogram.
• Middle East and South Asia: Rates declined 2%.
• Africa: Rates rose 10%, offsetting some weakness elsewhere.

WorldACD also cautioned against reading year-on-year growth in isolation. Changing trade policies, import-rule changes in Europe and geopolitical disruption all affect this year’s comparisons, making year-on-year movements harder to interpret in isolation without fuller context. A 9% annual tonnage gain therefore does not establish uniform route conditions or adequate available capacity.

Gulf capacity takes a steeper decline

Global air cargo capacity contracted 1% in week 41, marking a second consecutive weekly fall. Asia-Pacific capacity fell 3%. Middle East and South Asia capacity also declined 3%.

WorldACD partly attributed the Middle East pressure to renewed disruption affecting Saudi Arabia after attacks by Yemen’s Houthis on several Saudi airports, including Riyadh’s King Khalid International Airport. The resulting disruption reduced available capacity.

The report did not identify the other affected airports or quantify airline-by-airline reductions. Gulf capacity fell 4% week on week, reversing the increase recorded in week 40.

WorldACD said Gulf capacity stood 20% below late February, before the US and Israel attacked Iran. The reduction shows how geopolitical developments can remove cargo capacity independently of underlying demand.

For airlines, lower capacity limits how much cargo their networks can carry. For forwarders, it narrows alternatives. For cargo owners, it leaves more of the pricing equation outside the headline rate.

Fuel costs undermine the stability

WorldACD cited jet fuel prices 111% higher year on year, based on IATA and Platts data, alongside fuel surcharges and continuing capacity disruption on selected markets. The report gave no dollar fuel price or surcharge amount, so pass-through remains unquantified.

That caveat weakens any reading of stable headline rates. A shipper whose shipment carries a fuel surcharge may pay more than the global spot average. The US$3.13 full-market average blends spot and contract shipments. It cannot show what any cargo owner will pay.

WorldACD expects Asia-Pacific capacity to recover after the early-October holidays end. Gulf capacity remains less certain, with further disruption possible amid renewed regional tensions.

What does this change for shippers?

The immediate task for airlines, forwarders and cargo owners is to separate a temporary seasonal slowdown from persistent capacity and operating-cost constraints in the same market. October figures point to demand that remains stronger than a year earlier, not demand that is unrestricted.

A flat weekly rate can conceal three simultaneous pressures: fewer lifts, higher fuel costs and geopolitical risk. It can also conceal uneven pricing, because African rates rose 10% while Asia-Pacific rates fell 3% and Middle East and South Asia rates fell 2%.

For planning, the better signal is the interaction of volume and capacity. Global tonnage is 9% above last year, yet global capacity has fallen for two weeks. Gulf capacity is 20% below late February. An Asia-Pacific holiday recovery will not, by itself, restore Gulf network availability.

The practical answer is to price by lane, service and contract rather than by the US$3.55/kg global spot average. Shippers should also test how quickly capacity returns once Golden Week ends. WorldACD expects an Asia-Pacific recovery, but offers no comparable certainty for the Gulf. The next capacity data should show whether holiday constraints ease while fuel costs and regional disruption persist.