Air freight rates decline on LNY impact: TAC Index

Global air freight prices have fallen back again, according to the latest data from TAC Index, the leading price reporting agency (PRA) on air freight.

"The overall Baltic Air Freight Index calculated by TAC declined 8.2 percent over the week to 19 February, leaving it lower by 21.2 percent over 12 months. Despite ongoing disruption to ocean shipping in the Red Sea and congestion leading to the suspension of business in certain locations such as Dubai and Bangkok, the overall decline last week was not surprising as air cargo volumes out of China fell sharply during the Lunar New Year holidays," says the latest update.

After recent gains, the index of outbound routes from Hong Kong suddenly dropped 13 percent WoW to put it back in negative territory over 12 months by 8.3 percent. "Outbound Shanghai fell 11.5 percent WoW with double-digit declines on many lanes leaving it at -5.4 percent YoY. Out of India, however, there were substantial double-digit gains on rates both to Europe and the US – indicating perhaps more shippers turning to air cargo to beat ocean transport problems."

Other major markets were mixed, the update added. "From Europe, the index of outbound routes from Frankfurt was up sharply by 6.7 percent WoW, boosted by higher rates both to China and to South East Asia, leaving the index at -39.7 percent YoY. The index for outbound London Heathrow fell 6.9 percent with declines on all major lanes leaving it at -51.3 percent YoY."

From the U.S., the outbound index from Chicago moved up 2.4 percent, led by stronger rates to South East Asia, to leave that index at -31.3 percent YoY. Overall, however, rates out of the U.S. were mostly falling with lower levels recorded both to Europe and to South America, the update added.