Aug 2021: the devil is in the details

September 28, 2021

Looking at the Year-on-Year (YoY) volume comparisons for the last 5 months, we observe double digit growth rates. Yet, they are declining steadily: in April the YoY change stood at 53%, in June at 31% and in August at 21%. Overall volume for the first eight months of 2021 is 22% above the level in 2020.

Following the trend in recent months, the volume pattern of 2021 is not very different from the pattern in 2019.  Year-to-Date (YtD) 2021 compared with YtD 2019 (Yo2Y) shows only a 0.6% difference, as illustrated in the chart below. One would almost think it is business as usual, or business as we were used to pre-COVID, but the reality is quite different for many cargo players.

 
The worldwide Yo2Y volume growth is only an average of course. There are many players in the industry who do not experience this +1% volume change in their own business. So we digged one level deeper in our databases.

In July, we reported that the origin regions Africa, Europe and Middle East & South Asia are below 2019 volume levels: this has not changed. If your business is in Asia Pacific, Central & South America or North America, areas with high single digit growth, your fortune may be better. Also within the regions themselves, we see quite some differences. In the chart below we have plotted the top-5 cities per region, and show the Yo2Y development of chargeable weight for outbound plus inbound. Airports, handlers, forwarders, airlines and GSAs with business to/from these different cities, will certainly be impacted differently.


 
Looking at the individual performance of the 100 largest forwarders in the world, it is worth noting that only very few came close to the Yo2Y worldwide average. In the chart below we have sorted the top-100 forwarders from lowest to highest Yo2Y growth, showing a broad spectrum for the performance of individual forwarders in 2021. The global top-20 forwarders - marked yellow in the chart - are no exception to this.


 
In the period through Aug 2021 the worldwide USD rate/yield was 19% higher than in 2020, and still a whopping 81% higher than in 2019 (Yo2Y). The product categories General Cargo, Pharma/ Temp and Vulnerables/High-tech perform close to the Yo2Y average rate increase, whereas other categories like Perishables and DGR have seen lower rate increases. The chart below also illustrates the difference in weight changes over the last two years for the different product categories.


 
Rates have continued to go up in the five weeks ending on September 19 (see the chart below): the worldwide average USD rate went up by a 10%. In the same period in 2019, the average rate went up by less than 1% ….. But here as well: very large differences were reported from one market to another, bringing to mind the old saying that the devil is in the details.…