Demand dips due to US Independence Day, rates stay high
Avg rates from Vietnam to US of $6.62/kg during July 1-7 show highest increase (+147%), ex-Asia, compared with last year
Global air cargo demand dropped by around five percent in the first week of July, mainly due to the impact of U.S. Independence Day holidays but average worldwide rates remain high, thanks to continuing rises from Asia Pacific origins.
The five percent drop in worldwide tonnages in week 27 (July 1-7) included a fall of 13 percent from North America origins with the Fourth of July celebrations also contributing to an eight percent drop from Central & South America (CSA) and declines of four percent from Europe and three percent from Asia Pacific, according to the latest data from WorldACD Market Data.
Worldwide tonnages were up, year on year (YoY), by 11 percent in week 27, roughly in line with the figure for June and for the second quarter of 2024 as a whole, according to more than 450,000 weekly transactions covered by WorldACD’s data. For weeks 26 and 27 combined, tonnages were up by 13 percent YoY.
Rates continue to rise
Average worldwide rates of $2.57 per kilo in week 27 were up two percent compared with the previous week, based on a full-market average of spot rates and contract rates, driven chiefly by a three percent rise from Asia Pacific origins.
The $2.57 per kilo is a rise of 14 percent YoY with prices also still up very significantly compared with pre-Covid levels (+48 percent compared to July 2019), the update added.
The average spot rates from Asia Pacific to the U.S. stood at $5.72 per kilo in week 27, up 68 percent YoY. "Around half of Asia Pacific tonnages to the U.S. originate from China and Hong Kong where average spot rates in week 27 of $5.34 per kilo and $4.84 per kilo represented YoY increases of 38 percent and 12 percent, respectively."
Rates from Vietnam to the U.S. of $6.62 per kilo show the highest increase compared with last year (+147 percent, YoY) of any Asia Pacific to the U.S. Rates from Thailand ($6.46 per kilo) and Singapore ($7.02 per kilo) have continued to rise strongly in recent weeks, and are also more than double their equivalent levels last year, the update added.
