Global air freight rates ease after Middle East-driven surge
According to TAC Index, jet fuel prices fell in early May while rates from India, Hong Kong and Korea declined week-on-week but stayed above last year.
UPS and Cargolux aircraft at Hong Kong Air Cargo Terminals Limited (Hactl) during cargo loading operations
Global air freight rates declined slightly last week after sharp increases linked to the recent Middle East conflict, according to the latest data from the TAC Index. Following a short-term fall in jet fuel prices, the overall Baltic Air Freight Index (BAI00) dropped by 4.9% in the week to May 18, although it remained 30.4% higher year-on-year.
Jet fuel prices fell by around 10% during the first week of May after earlier increases, though they were still about 80% higher compared with a year earlier.
BAI spot rates declined during the week from Hong Kong, India and Korea. Rates from China to the United States fell week-on-week, while rates to Europe increased slightly. The index of outbound routes from Hong Kong (BAI30), which reflects spot and forward contract rates, declined by 2.4% week-on-week but remained 34.3% higher year-on-year. Outbound Shanghai (BAI80) also fell by 1.7% week-on-week, while remaining 38.6% higher than a year ago.
In South East Asia, rates from Vietnam and Bangkok increased week-on-week to both Europe and the United States and also remained significantly higher year-on-year. Rates from hubs in East Asia, including Seoul and Taiwan, declined to Europe but showed mixed trends to the United States. Rates from India fell week-on-week but stayed significantly higher than a year ago.
From Europe, rates declined week-on-week on transatlantic routes to the United States and on routes to China, India, Japan and the UAE following large increases to Gulf destinations after the Iran conflict affected capacity. However, rates rose to Australia, Mexico and South Africa.
The index of outbound routes from Frankfurt (BAI20) fell by 2.4% week-on-week and remained 9.6% higher year-on-year. Outbound London Heathrow (BAI40) dropped by a sharper 13.8% week-on-week after strong gains in recent months, though it was still up 40.5% year-on-year.
From the United States, rates increased slightly week-on-week to Europe and South America but declined to China and Korea. The index of outbound routes from Chicago (BAI50) fell by 24.6% week-on-week and remained 4.7% higher year-on-year. Rates from Mexico to Europe recovered from the previous week’s decline and remained well above year-ago levels.