Global air cargo rates rise despite Easter-driven slowdown

Global airfreight volumes declined during week 14 from March 30 to April 5, even as rates continued to increase, according to the latest data released by WorldACD Market Data.

With the exception of the Middle East and South Asia regions, air cargo tonnage fell across all major markets, registering a week-on-week decline of 4 per cent. The contraction ranged from a 3 per cent drop in the Asia Pacific to a 9 per cent fall in the Americas. The slowdown has been linked in part to reduced activity during the Easter weekend.

Despite the fall in volumes, pricing trends remained firm. Average global airfreight rates rose 4 per cent week on week to $3.10 per kilogramme. This increase was driven by higher pricing from North America, Asia Pacific and Africa. On a year-on-year basis, rates were up 21 per cent, with all regions except Central and South America recording double-digit gains. The Middle East and South Asia region recorded the steepest increase, with rates rising 59 per cent compared to the same period last year.

Air cargo flows from the Asia Pacific showed mixed trends across key trade lanes. Shipments to Europe declined 3 per cent week on week, led by lower volumes from Thailand, Singapore, Hong Kong and China. This resulted in an 8 percent year-on-year drop in exports to Europe. Traffic to the United States fell 1 per cent overall, with declines from Thailand, China, Japan and Hong Kong offset in part by higher volumes from Malaysia and South Korea.

Rate developments on these routes diverged from volume trends. Pricing from the Asia Pacific to Europe increased 3 per cent week on week, supported by higher rates from China, Singapore, Taiwan and Hong Kong. Spot rates from the Asia Pacific to the United States rose 9 per cent, with increases from most origins, including Hong Kong, Vietnam and China.

The Middle East and South Asia region continued to record growth in volumes despite ongoing conflict. Chargeable weight increased 10 per cent week on week and was 11 per cent higher compared to a year earlier. Capacity in the region expanded 15 per cent over the previous two weeks, making it the only origin region to register growth over this period. However, capacity and tonnage from the Gulf remain significantly below pre-conflict levels.

Pricing from the region showed a slight decline of 1 percent week on week to an average of $4.07 per kilogramme. This was influenced by a sharp drop in spot rates from Dubai to the United States, as well as lower rates from India to both Europe and the United States. These declines offset increases in pricing from Dubai and Bangladesh to Europe. On a year-on-year basis, rates from the region rose 59 per cent, driven by strong gains on routes to the United States and Europe.

Monthly data for March reflects a broader shift in market dynamics linked to disruptions in the Middle East. After growth in January and February, global air cargo tonnage declined 4 per cent year on year in March. The Middle East and South Asia region recorded the largest drop at 21 per percent, followed by Africa at 13 per percent, while Europe and Asia Pacific reported declines of 5 per cent and 4 per cent, respectively.

At the same time, pricing strengthened due to capacity constraints and additional costs. Global airfreight rates increased 12 percent year on year in March, reversing earlier trends. Rates rose 52 per percent from the Middle East and South Asia region, 24 per cent from Europe and 18 per cent from Africa.

Outlook for the sector remains uncertain as geopolitical developments continue to influence operations. A ceasefire agreement between Washington and Tehran has raised expectations of stability, but concerns remain over its durability. While oil prices have declined following the agreement, industry observers indicate that inflation and fuel costs are likely to remain elevated.

Capacity recovery is expected to be gradual, particularly for bellyhold operations through the Middle East. This is likely to support rate levels in the near term. Shipping lines are also awaiting clarity on the resumption of movements through the Strait of Hormuz, with expectations that a return to previous traffic levels will take time.