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2022-03 Understanding ATI Masthead

March 7, 2022

Understanding the Air Timeliness Indicator

Chris Rogers

Chris Rogers

Supply Chain Economist

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What is the state of the global supply chains? How long is it taking to ship goods by air? Are conditions universal? Are there regular fluctuations? The Flexport Air Timeliness Indicator (ATI) provides a proprietary read on how long it takes to get products from factories in Asia to the time they arrive at customers’ premises in North America and Europe. This report provides an overview of the ATI, how it works and what it does and does not show.

A Key Metric for the Airfreight Industry

Flexport’s Air Timeliness Indicator (ATI) is meant as a broad measure of the severity of the stress on global airfreight shipping. It measures the journey of air cargo over several stages:

  • Cargo, which is consolidated for transit, is transferred to the airport.
  • The cargo is then flown from the origin airport to the arrival airport.
  • The cargo is then transferred to a deconsolidation facility
  • Finally, after deconsolidation it is delivered to the importer’s premises

Each of the stages, excluding the flight, may involve storage phases in warehousing facilities. To learn more about the air freight industry, including the specifics of cargo consolidation and deconsolidation, please visit our FlexU site.

There are two separate indicators provided, one each for the world’s two largest trade lanes: the Trans-Pacific Eastbound (TPEB), from Asia to North America, and the Far East Westbound (FEWB), from Asia to Europe.

Each of these is measured in days, allowing for easy interpretation, with data provided on a weekly basis, averaged over the previous four weeks to ensure it is easy to see trends rather than short-term volatility.

We do not give a detailed breakdown of the journey into its component stages.

We can, however, say that there have been significant increases in all three stages over the course of the pandemic.

Key Features of the ATI

Some key features of the measures include:

Frequency: We release updates at the beginning of each week. The weekly figure describes the journey length of cargo that were picked up from the destination port in the preceding week.

Retrospective: The ATI is a retrospective measure, as the journey lengths are measured upon journey completion. This means that there could be a significant discrepancy between the expected journey time for a shipment that is cargo-ready today and this week’s ATI. The use of a trailing average adds value in being able to determine trends.

Average: For each trade lane, the ATI averages across many containers with different types of goods, different origin airports, and different destination airports. This composition can shift from week to week. Because it is a retrospective measure, it necessarily also averages across shipments that were cargo-ready at different dates.

Sampling: The ATI uses Flexport platform data. As such, it covers only a fraction of airfreight. However, the containers move on multiple routes and multiple carriers and pass through multiple airports. Thus, the ATI provides a broad sample of the performance of the airfreight network.

Transit Times Still Flying High

We present the data so everyone can draw their own conclusions about recent experience. The chart below provides a snapshot of the ATI as of March 6, 2022.

We note six striking features of the data to date:

Flying is only a small part of the airfreight process. Typical transcontinental flights take 10 to 12 hours whereas, from end-to-end, the journey including consolidation and deconsolidation process now takes between 250 hours (10.4 days) on FEWB and 330 hours (13.8 days) on TPEB routes.

The total length of journeys has increased steadily during the pandemic. In 2019 the TPEB journey averaged 7.4 days. That climbed to 10.0 days in 2020, likely, in part, because of a dip in available plane capacity.

Global airfreight capacity dropped by 42.0% in April 2020 versus April 2019 according to IATA data. While it has since largely recovered, it is still 4.7% below the same period of 2019 as of December 2021. The recovery in availability should mean more capacity and lower shipping times. However, the TPEB ATI averaged 15.7 days in Q1’22 and has dipped to 13.8 days as of March 6, suggesting other factors are still driving higher shipping times.

There is a significant difference in timing by route that has emerged during the pandemic. In 2019, on average, the FEWB route averaged 7.0 days while the TPEB averaged 7.4 days. The gap has widened steadily in both absolute and percentage terms, with the latest ATI for TPEB standing at 13.8 days and FEWB at 10.4 days as of March 6, 2022.

The impact of elevated demand and COVID-19 related network disruptions have affected ocean freight more than airfreight in proportional terms. As of March 6, the Flexport Ocean Timeliness Indicator for TPEB routes, averaged over a four-week period, stood at 213% of its January 2020 level. The ATI over the same period stood at 164% of its January 2020 level.

The two measures have seen different, mode-specific challenges throughout the past two years, as shown in the chart above. Both have nonetheless shown evidence of having peaked in mid-January 2022, although seasonality may play a part in that (see below).

The conflict in Ukraine has caused significant disruptions to global air routes, as discussed in Flexport research. Yet, the additional flight times and potential - but not certain - disruption to other parts of the air transit process may take a few weeks to show in the indicator.

Finally, there is a degree of seasonality to the data, as shown in Figure 3, where each year’s data is rebased to 100 as of week five. A peak around Weeks six to 10 of the year corresponds to the market closures and reopening associated with the Lunar New Year.

Notably, that has not occurred in 2022, perhaps indicating that facilities have stayed open to deal with the backlog. In general, such seasonal movements pose the challenge of differentiating between new trends and expected developments for a given time of year.

A dip at around week 45 corresponds to the Golden Week holiday. While not as big a holiday as Lunar New Year it nonetheless disrupts the airfreight network in China. Finally, an upturn late in the year indicates the pre-holiday shipping rush as well as the launch of major new consumer electronics products including mobile phones and videogame consoles.

Need More? Flexport does not post the data underlying the ATI. We make it available to the media for the limited purpose of creating graphics for publication. For others, please inquire at economics@flexport.com.

Disclaimer: The contents of this report are made available for informational purposes only and should not be relied upon for any legal, business, or financial decisions. Flexport does not guarantee, represent, or warrant any of the contents of this report because they are based on our current beliefs, expectations, and assumptions, about which there can be no assurance due to various anticipated and unanticipated events that may occur. This report has been prepared to the best of our knowledge and research; however, the information presented herein may not reflect the most current regulatory or industry developments. Neither Flexport nor its advisors or affiliates shall be liable for any losses that arise in any way due to the reliance on the contents contained in this report.

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