No evidence of front-loading on tariff, de minimis worries: WorldACD

There is no real evidence, in data terms, of a significant level of front-loading activity in anticipation of the expected tariffs in the U.S. on the China-origin air cargo nor of the confusion caused by de minimis rules for China, leading to unexpectedly low volumes of China/Hong Kong origin cargo to the U.S.

It is also possible that those factors may have cancelled each other out to some extent, according to the latest update from WorldACD Market Data.

Tonnages from China and Hong Kong to the U.S. rebounded significantly in week seven, regaining +40 percent and +27 percent, respectively, week on week. Nevertheless, they remain well down (around -20 percent and -30 percent lower, respectively) compared with their average levels in January.

Worldwide air cargo tonnages have continued to recover slowly from what was a shallower Lunar New Year (LNY) dip than last year, although it’s too soon to get much sense of how normal or healthy demand this year will be, the update added.

"Following a -13 percent tonnage decline during this year’s LNY period, worldwide tonnages have rebounded with two consecutive +three percent week-on-week (WoW) increases. That compares with a total drop of around -20 percent in the weeks surrounding LNY in 2024, followed by a combined rebound of +15 percent across the following two weeks."

Tonnages from Asia Pacific origins this year recorded a +15 percent WoW rebound in week seven (February 10-16), after dropping by around -35 percent from a pre-LNY high in week four to their lowest point in week five, the update added. "That compares with a fall of almost -60 percent in the equivalent phase during last year’s LNY period, based on the more than 500,000 weekly transactions covered by WorldACD’s database."

This year's dip in air cargo tonnages during the LNY period is relatively shallow compared with last year, the update added. "The overall increasing trend of e-commerce demand since last year might have contributed to this dynamic, but the trends and underlying factors for air cargo tonnages from China and Hong Kong are rather complex this year and remain difficult to interpret, especially until we are well clear of the effects of LNY and recent US de minimis rule changes and reversals."

Spot rates rally
Average spot rates from Asia Pacific origins in week seven of $3.54 per kilo were up two percent WoW, and is nine percent higher than this time last year. "From Asia Pacific to Europe, rates were more or less stable at $4.13 per kilo with Hong Kong to Europe flat at $4.95 and China to Europe rates gaining around +10% to $4.34 per kilo."

Average spot rates from Asia Pacific to the U.S. increased around four percent to $4.81 per kilo, although prices from China to the U.S. continued to decline, losing another six percent WoW to $3.74 per kilo, the update added.