Global air freight rates fall for fifth straight week: TAC Index

Global air freight rates declined for the fifth consecutive week, according to the latest data from TAC Index. The global Baltic Air Freight Index (BAI00) fell 0.6% in the week to July 27, leaving it 16.8% higher than a year ago despite volatile energy and jet fuel markets following renewed conflict in the Middle East.

According to TAC Index, several factors kept rates subdued, including additional passenger bellyhold capacity during the summer holiday season and better preparedness among carriers to handle market disruptions after the shocks experienced in March.

Rates on the busiest routes from China continued to fall week on week to Europe, while remaining largely unchanged to the US. Spot rates from Hong Kong, Shanghai and India strengthened on transpacific routes but declined on services to Europe. Rates from South Korea weakened on both routes.

The outbound Hong Kong index (BAI30), which covers spot and contract rates across multiple trade lanes, increased 0.2% week on week and was 16.5% higher year on year. The outbound Shanghai index (BAI80) fell 0.2% week on week but remained 23.3% higher than a year earlier.

From South and South East Asia, rates to Europe generally declined, except for a sharp increase on routes from Bangkok. Rates to the US increased from Hanoi, Malaysia and India.

In North Asia, rates from Seoul and Taiwan fell on both US and European routes after earlier gains driven by demand from the AI and semiconductor sectors. However, rates from Japan to Europe increased.

From Europe, air freight rates declined on most trade lanes, including services to the US, China, Japan, India, Mexico, Brazil, Australia and South Africa. The main exception was the Europe-UAE market, where rates rose again following renewed disruption caused by conflict in the Middle East and remained more than double their level of a year ago.

The outbound Frankfurt index (BAI20) fell 7.6% week on week, leaving it 2.5% lower than a year earlier. In contrast, the outbound London Heathrow index (BAI40) rose 7.4% week on week, supported by higher rates to the Middle East, South East Asia and the US, and was 20.1% higher year on year.

From the US, rates strengthened on several routes to China, Germany and the UK, as well as to Brazil, although rates to Europe and South America were mixed overall. The outbound Chicago index (BAI50) declined 4.2% week on week but remained 16.4% higher than a year ago. Rates from Mexico to Europe also edged higher and continued to remain well above last year's levels.