Air cargo rates steady; markets fret over US elections
"Lot of BSA capacity has been signed up for Thanksgiving and Christmas, which could presage a big spike in spot rates."
Global air freight prices were slightly lower overall last week (for the week ended July 1, 2024), according to the latest data from TAC Index.
"The overall Baltic Air Freight Index calculated by TAC was lower by -1.4 percent though still ahead by +10.4 percent over 12 months – reflecting what is still a stronger than usual market for the summer period, with peak season still some months away," the update added.
Rates out of China were also slightly down overall, though up again on many lanes to Europe. "The index of outbound routes from Hong Kong was off marginally WoW to leave it still well ahead YoY by +21.1 percent. Outbound Shanghai was also a tad lower WoW but still a long way up by +42.1 percent YoY. Rates out of India were up yet again to Europe, leaving them not far from a three-fold increase over 12 months. Out of Vietnam, rates were also slightly up again to Europe, though falling back a little to North America."
Outbound London was an exception with a gain of +4.4 percent WoW with gains on most lanes from there helping cut the YoY fall to -27.2 percent.
From the Americas, after some recent strong gains, rates from Chicago maintained their volatile short-term pattern with a steep fall of -14.2 percent WoW pushing the YoY decline back up to -32 percent. Overall, rates from the U.S. were lower on most major lanes – including to South America as well as to Europe and China, the update added.
Sources report a lot of block space agreement (BSA) capacity has already been signed up for Thanksgiving and Christmas – which could presage a big spike in spot rates later in the year, writes Neil Wilson in his blog.
"The big elephant in the room continues to be the U.S. election in November – with increasing concerns about President Biden’s fitness for the task and prospects of a return to power for ex-President Trump. That leaves some fretting about all sorts of potential consequences from the future of democracy in the U.S. to the stability and coherence of the NATO alliance and the wider western rules-based world order."
Whatever the result in November, it may not be so great for trade and growth, says Wilson.
