The index, compiled by the Hong Kong Productivity Council (HKPC), shows signs of recovery in the sector, though several challenges still lie ahead.
Recovery and positive growth
The Overall Air Trade Index experienced a slight recovery, reaching 41.2 points in Q3 2024, marking the highest level since early 2024.
This growth is primarily driven by the rise in (re)-exports and urgent orders, coupled with positive performance in European and American markets.
Europe’s index rose by 6 points to 46, the highest among market indices, while America’s index saw a substantial 7-point increase to 42, driven largely by export growth.
These regions’ robust performance offset declines in the Asia-Pacific market, which fell by 5 points to 37 due to notable drops in China and Japan.
Challenges from tariffs and global incidents
The airfreight industry is bracing for higher costs due to the ongoing Red Sea security issues affecting maritime transport, with 70% of local air traders anticipating upward pressure on air freight prices in the latter half of 2024.
Additionally, the US’s recent increase in tariffs on certain China-made products has affected 45% of air traders, prompting 35% of them to raise prices to offset the additional costs, while 26% plan to expedite shipments to mitigate the impact.
Commodity performance
Among air-freighted commodities, “Gifts, Toys & Houseware,” “Electronics Products & Parts,” and “Apparel & Clothing Accessories” indices recorded over 40 points, indicating significant growth.
On the other hand, “Food & Beverage” saw a decline, driven by a drop in (re)-exports.
Sustainability and carbon emission reduction
Sustainability remains a focal point, with 78% of air traders willing to invest up to 10% of their logistics costs to reduce carbon emissions.
However, cost inflation and the lack of ESG implementation hinder progress for some companies.
Future outlook
Looking ahead, the Index states that the airfreight industry must navigate a blend of opportunities and hurdles.
The authors of the index stress that commitment to sustainability and the ability to adapt to global market shifts will be crucial.
Moreover, it is said that as air freight traders continue to implement strategic measures to mitigate the impacts of tariffs and global incidents, the sector’s resilience will be tested.
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