Air freight rates move up after recent declines: TAC Index

After a series of recent falls, global air freight rates firmed up a little last week, according to the latest data from TAC Index.

"The global Baltic Air Freight Index calculated by TAC gained +1.5 percent in the week to May 12, leaving it not that far below where it was 12 months ago at -3.6 percent year-on-year," according to the weekly update.

Sources said the recent stand-off on trade and very high tariff levels between the U.S. and China had led to the cancellation of many block space agreements (BSAs) though that had also been significantly offset by a sharp reduction in Transpacific freighter capacity. Following the subsequent announcement of a new U.S.-China deal on trade, sources now expect both volume and capacity to ratchet up again in a race to restock empty shelves, the update added.

Rates to the U.S. from China were already rising again last week, and little changed on lanes to Europe where rates had not fallen so much previously. "Despite continuing weakness in spot rates, the index of outbound routes from Hong Kong edged up overall +1.1 percent WoW, leaving it at -5.6 percent YoY. Outbound Shanghai gained a similar +0.9 percent WoW, leaving it at -7.8 percent YoY. Rates from Vietnam were rising to Europe but falling to the U.S. Out of India, the trends were opposite, with rates rising to the U.S. but falling to Europe."

Out of Europe, there was little change overall on lanes to China and Japan while rates to the U.S. dipped a little, the update added. "The index of outbound routes from Frankfurt gained +1.8 percent WoW, leaving it ahead by +6.9 percent YoY. Outbound London Heathrow bounced back strongly from some recent steep falls, gaining +21.3 percent WoW – cutting its decline to -9.3 percent YoY."

After some big recent gains, the index of outbound routes from Chicago declined seven percent WoW, though still ahead by +20 percent YoY.