The Asia Pacific airfreight market is navigating a turbulent landscape in Q4 2024, shaped by complex economic and seasonal dynamics. Below, we break down the recent market trends and factors affecting airfreight demand and capacity.

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Global Economic Slowdown and Manufacturing PMI

The Global Manufacturing Purchasing Managers Index (PMI) fell below 2023 levels for the first time this year. It signals an economic slowdown. This slowdown is expected to persist through Q4. This decline, impacting manufacturing and logistics industries worldwide, has led to subdued airfreight demand in most markets.

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Growth in Select Asian Markets

Despite the global slowdown, India and Thailand are notable outliers in Asia. They continue to show resilience and growth in airfreight demand. These economies are benefiting from strong domestic production and rising demand, both domestically and internationally.

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Peak Airfreight Season and E-commerce Demand

October marked the start of the traditional peak season for airfreight, fueled by e-commerce and new electronic product launches. This period is expected to extend through the holiday season. It brings a surge in shipment demand from e-commerce hotspots, particularly South China.

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Capacity Constraints Across Routes

Capacity issues are notably affecting intra-Asia routes as airlines prioritize long-haul flights to maximize revenue. Some specific routes are encountering significant backlogs. Routes like Tianjin to Europe and the US require shippers to book at least a week in advance.

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Impact of Holiday Sales and E-commerce

Key holiday events, including Singles Day (11/11) and Black Friday, are expected to heighten airfreight demand further. South China, in particular, anticipates increased volumes to meet e-commerce fulfillment for these events, adding to regional capacity pressures.

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Regional Variances and Market Constraints

Several Asia-Pacific countries are experiencing unique capacity pressures:

• Vietnam: Robust manufacturing activity in Vietnam to meet Q4 orders is limiting shipping capacity.
• South Korea: Strong demand for semiconductors bound for the US is creating space shortages.
• Singapore: Also experiencing high demand, with capacity constraints persisting into Q4.

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Variable Market Influences

Various market factors are influencing airfreight rates and capacity. These include labor shortages, high interest rates, a strong US dollar, and elevated oil prices. These challenges, coupled with the year-end surge in activity, are contributing to increased rates and potential delays.

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Indian Festivals and Increased Freight Movement

The festive season in India, particularly around Diwali, is boosting airfreight volumes. Consumer demand for goods is rising across the board. This trend is putting pressure on available capacity. It is also expected to contribute to higher freight rates.

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Rate Increase Expectations

Given these factors, airfreight rates from the Asia Pacific to the US are forecasted to increase through Q4. High demand, constrained capacity, and fluctuating market conditions are setting the stage for an upward trend in pricing.

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Summary Table of Key Data Points

Aspect	Details
Global Manufacturing PMI	Dropped below 2023 levels; signals economic slowdown.
Growth in Asia	Positive demand in India and Thailand despite broader market declines.
Peak Season Start	Began mid-October, spurred by e-commerce and new electronics launches.
Capacity Constraints	Limited capacity on intra-Asia routes; backlogs on Tianjin-Europe and US routes.
E-commerce Holiday Demand	Key dates: 11/11 (Singles Day), Black Friday increasing demand from South China.
Regional Variances	– Vietnam: Limited shipping capacity due to Q4 order surge. – South Korea: Semiconductor demand causing space issues. – Singapore: Capacity constraints continue.
Variable Market Factors	Influenced by labor, interest rates, strong USD, high oil prices, and year-end activities.
Indian Festival Impact	Diwali increases consumer demand, boosting airfreight volumes.
Rate Trends	Rates from Asia Pacific to US expected to rise due to demand and capacity issues.

This overview highlights the nuanced developments in the Asia Pacific airfreight market as we progress into Q4. Economic, seasonal, and capacity factors are shaping immediate and near-term market expectations.