Rates spike from Europe to Americas, lifts global prices

A sharp rise in air cargo spot rates from Europe origins, particularly to the Americas, has helped to further drive up average worldwide spot prices in the second full week of November with rates to Brazil rising especially rapidly in the last two weeks, linked to congestion problems at São Paulo’s Guarulhos International Airport.

Average spot rates from Europe origins rose by a further 10 percent in week 46 (November 11-17) to $2.71 per kilo, according to the latest weekly figures and analysis by WorldACD Market Data. "That’s +23 percent higher than this time last year. Average spot rates ex-Asia Pacific were flat in week 46 compared with the previous week at $4.39 a kilo. A three percent increase in tonnages ex-Asia Pacific also contributed to a four percent WoW rise in average worldwide spot rates to $3.14 per kilo. There were modest WoW spot rate increases from Central & South America (four percent) and North America (three percent) origins."

Buoyant transatlantic market
The biggest shifts in the last few weeks have been on the westbound transatlantic market, particularly from Europe to the USA and South America, the update added. "Europe to the USA spot rates recorded consecutive WoW increases of +16 percent and +17 percent in weeks 45 and 46, taking them to $3.34 per kilo – a rise of +48 percent in five weeks and +36 percent in only two weeks. That reflects a fall in capacity following the start of airlines’ winter schedules from October 27, and some demand increases ahead of the Thanksgiving holiday on November 28 but also the fact that cargo load factors on the westbound transatlantic market were already relatively high."

Average spot rates from Europe to South America have zoomed from $4.32 per kilo in week 44 to $5.88 in week 46 – a rise of +36 percent. By far the biggest increases have been to Brazil, where high levels of congestion at Guarulhos International Airport and a five-day cargo embargo to November 11 have caused Europe to Brazil spot rates to jump from $4.19 per kilo in week 44 to $6.58 in week 46 – a rise of +57 percent.

Strong but stable Asia Pacific markets
Although markets remain relatively strong, including ex-Asia Pacific, good advance planning by air cargo stakeholders looks set to avert a major peak season capacity crunch and very steep rate rises from Asia Pacific markets, the update added. "Spot prices to Europe from China, Hong Kong and South Korea all recorded WoW rises in week 46 but spot rates from Asia Pacific to the USA dipped by four percent WoW, including a two percent drop from China."

Based on the more than 450,000 weekly transactions covered by WorldACD’s data, worldwide average spot prices are 25 percent above last year’s levels (YoY) with Middle East & South Asia up 73 percent and ex-Asia Pacific up 22 percent.

On a full-market average of spot and contract rates, overall worldwide rates were up two percent WoW and 11 percent higher YoY, the update added.