Spot rates surge to $9-10/kg, says Dimerco

The e-commerce market continues to drive demand, with leading e-commerce companies signing peak season charter agreements with commercial airlines. "This has further reduced the availability of commercial flight capacity, particularly on routes from China to the U.S.," says the latest update from Dimerco.

"Another product category that will contribute to the capacity demand is the consumer electronics market, which will begin its peak season in September. With Apple shifting iPhone 16 manufacturing back to China, the first wave of this product is expected to hit the market in September, alongside other new launches. Spot rates have already surged to $9−$10 per kg."

Kathy Liu, VP, Global Sales & Marketing, Dimerco Express Group says: "As more production of finished goods has relocated from China to Southeast Asia since 2022, additional capacity is required to transport these products to the U.S. and Europe. This has placed significant pressure on freighter services in key transit hubs like Taiwan, Korea, Japan and Hong Kong, impacting outbound capacity from these locations as well. With the peak season approaching rapidly, shippers are advised to plan their capacity needs at least two weeks in advance, especially for time sensitive shipments."

Space from markets like India (Chennai/Bengaluru) and Soekarno–Hatta International Airport, Indonesia and Kuala Lumpur International Airport, Malaysia continue to be tight with rising rates, the update added.

Country report
E-commerce demand from Taiwan remains strong, and export commodities from Taiwan mainly relate to artificial intelligence, high-speed computing and related goods.

"Space remains tight on the Taipei-U.S. route but it is showing slight improvements compared to last month. Large shipments are quoted on a case-to-case basis. To ensure space availability, express rate will be required. Airlines have more flexibility to negotiate their rates for routes from Taipei to China and Southeast Asia. However, destinations such as the U.S., Europe and India would be quoted on a case-by-case basis."

East China: Space and rates are stable on the U.S. lane from Shanghai, the report added. "The rate to Europe has decreased significantly with ample space. This is due to the current summer holidays in Europe lowering the demand."

North China: Beijing to USA - The rate has increased with tight space due to the high demand for e-commerce products from Beijing to the U.S. "Tianjin to USA – although still at a high level, the rate has stabilised compared to the previous month. However, there is a tight capacity as there are limited carriers operating this lane, in addition to the tight capacity at the connecting hubs."

*Beijing to Europe – The rate has increased and the space is tight.

*Tianjin to Europe - The rate has decreased since the beginning of August. However it is expected to increase at the end of the summer holidays in September.

*Southeast Asia Lane – Both space and rate are stable.

South China: The U.S. lane rate decreased slightly in August but is expected to increase in September out of Guangzhou and Shenzhen.

Rate has decreased due to the summer holiday in Europe, and both rate and space are stable on the South East Asia lane, the update added.

Hong Kong: Rates are expected to increase in September while rates and space are stable on the Europe lane.

South Korea: "Export space is getting tight due to high ocean freight rates and strong demand out of China via Korea (e-commerce and e-cigarettes). Space booking should be done at least two weeks in advance while the rate may be updated for every shipment."

South East Asia - Philippines: Long-haul shipments from the Philippines are still facing backlogs, particularly with connecting flights. Express rates are being applied to secure space, subject to confirmation, and transit times are exceeding three days, the update added. "As the local regulation does not have free time storage in the Philippines, it is advised to avoid weekend arrivals to reduce the storage costs."

Malaysia: The demand for air freight from Penang increases as many ocean shipments have converted to air. "For Kuala Lumpur, the summer demand continues to contribute to the tight space and high rates to Europe and the U.S./Canada. However, this demand is expected to fall entering Q4."

Vietnam: Due to the upcoming national holiday, space is extremely tight, particularly for shipments to the U.S./Canada. "Rates will vary depending on space availability with larger shipments being quoted on a case-by-case basis. For urgent shipments, express rates will be applied. It is recommended to book 2-3 weeks in advance to secure space."

Singapore: Air freight rates and demand from Singapore for long-haul routes are expected to remain high through the end of the Q4 peak season, the update added. "Some airlines have announced that they will no longer fly over Iranian airspace with immediate effect. Additionally, some airlines are no longer accepting new bookings to Europe, JFK (New York) and IAH (Houston). This is likely to result in increased backlogs for shipments to the U.S. and Europe, leading to longer transit times and higher spot rates."

India: Due to space constraints in ocean freight caused by carriers conducting blank sailings, time-sensitive cargo is increasingly being moved via air, further tightening space availability and driving up rates for shipments to the U.S./Canada.

Mexico: Aeromexico launched a new route from Monterrey to Seoul on August 1, and introduced a temporary direct flight from Monterrey to Tokyo, operating five times a week from July 10 to December 31. Both flights utilise wide body passenger aircraft for cargo, aimed at accommodating the growing demand for shipments of semiconductors, electrical resistors, cables and spare parts.

North America: Sufficient capacity is available from the summer schedule, says the update.

Europe: Air France KLM is cancelling a large portion of its cargo flights to Latin America in order to deploy the capacity on a new cargo route from Schiphol to Hong Kong beginning Sept 19. KLM is scheduled to have three flights per week between Schiphol and Hong Kong, which includes a stopover in Dubai.