Airfreight rate surge of three months comes to an end

The peak season surge in air freight rates of the past three months appears to have come to an end according to the latest data from TAC Index, the price reporting agency (PRA) for air freight markets.

The overall Baltic Air Freight Index suddenly fell by -20 percent over the two weeks to 1 January, putting it down by -31 percent over the past 12 months.

“Like the previous rise in rates, the sudden drop was heavily skewed by falling rates out of China, with every lane tracked from Hong Kong and Shanghai heading lower,” reads the report.

The index for outbound Hong Kong routes was down -23 percent over two weeks putting it back in negative territory YoY by -15 percent. Outbound Shanghai fell even more steeply, pushing to a fall YoY of -30 percent. Sources suggested the sudden drop probably reflected a drop in spot market volumes – leaving a higher proportion of business conducted at previously agreed (lower) contract levels. Rates from elsewhere in Asia were not falling so much WoW – and indeed higher on lanes to Europe from Vietnam, Bangkok and India.

Out of Europe rates were much more steady, with outbound Frankfurt off only -1 percent over two weeks, though still a long way down YoY by -48 percent. And outbound London enjoyed a bounce after recent falls, with gains on all major lanes pushing it up +5 percent since 18 December, though it too remains a long way lower YoY by -52 percent.

Out of the US, rates were generally falling with outbound Chicago down -8 percent over two weeks to leave it off YoY by -45 percent. Rates from the US were lower on most major lanes including to South America, though slightly firmer on Transatlantic routes both to and from Europe.

“However, there was little or no sign yet of any impact on air cargo prices from the disruption in ocean traffic caused by shipping being diverted from the Red Sea,” it also reads.