Hong Kong airfreight market outlook weakens but busy peak still expected

The market outlook of Hong Kong airfreight traders has weakened in recent months but the peak season is still expected to be busy.

The fourth quarter DHL Air Trade Index dipped by six percentage points compared with the third quarter survey to reach 35.2 points, with a decline of 8.7 percentage points for imports and 4.2 percentage points for exports.

The decline followed three consecutive quarters of increases in the index, peaking at 41.2 points in the third quarter.

DHL said quarter-on-quarter declines were registered across all regions included in the index – Asia Pacific, Europe, Americas and Rest of the World.

The largest fall came from the Europe index, which slipped from 46 points in the third quarter to 34 points in the fourth quarter.

The survey also examined the outlook for the peak season, and here, air traders based in Hong Kong remained positive, although not quite as positive as last year.

“In Q4 2024, air traders’ expectations for traditional peak season (Thanksgiving and Christmas Eve) remained relatively stable, with 20% of traders maintaining a positive outlook similar to that of the previous two years,” the report stated.

Source: DHL/Hong Kong Productivity Council

“However, the proportion of air traders holding negative expectations increased by 6%, reaching 31% this year, primarily due to a shift from neutral to negative sentiment.

“By commodity, respondents have the most negative outlook for Electronic Products and Parts, reaching 37%.”

Those expecting a positive peak period said this outlook was primarily driven by consumer spending expectations.

However, those with a more negative outlook for the peak, said their expectations were also driven by weak consumption demand (56%) at the destination.

This was followed by “high shipping costs” (30%). Regarding “other reasons” (19%) category, 28% attributed their negative outlook to “economic downturns”.

Source: DHL/Hong Kong Productivity Council

The results of the survey reflect wider market expectations, with many predicting a busy peak and others saying that companies had pre-planned and much of the peak cargo had been shipped early to avoid concerns about capacity shortages.

Earlier this month, TAC Index editor Neil Wilson said that there was a mixed outlook for how tight capacity would be during the peak season.

He told Air Cargo News that companies had been busy blocking out space on aircraft, which could mean there isn’t a spike in demand as companies have already planned the space they need, or that any spike would have a more pronounced effect on rates as there isn’t enough spare capacity to cater for spot market demand.

“Some think the tight capacity might push spot prices very high, but others think a lot of that marginal demand is already priced in.”

There was also an unexpected market slowdown in September, although many said this was blip ahead of the peak season.