Global air freight rates rise 1.3% after five weeks of declines

Global air freight rates increased slightly last week, ending five consecutive weeks of declines, according to the latest data from TAC Index. The global Baltic Air Freight Index (BAI00) rose 1.3% in the seven days to August 3 and was 19.6% higher than a year earlier. The increase came despite higher jet fuel prices following renewed hostilities in the Persian Gulf last month and continuing uncertainty over the on-and-off ceasefire between the US and Iran.

 Rates on the busiest routes out of China continued to fall week on week to Europe, where activity has slowed since the end of the de minimis regime into the European Union at the beginning of July. However, rates on Transpacific routes to the US strengthened. Spot rates from Hong Kong followed the same trend, declining to Europe but rising to the US. The outbound Hong Kong index (BAI30), which reflects both spot and forward rates, increased 3% week on week and was 22% higher year on year. The outbound Shanghai index (BAI80) fell 2.6% from the previous week but remained 20.5% above the level recorded a year earlier.

Across South East Asia, rates were generally weaker, with declines on most routes from Vietnam, Bangkok and Malaysia, reflecting the usual seasonal slowdown during summer. In North Asia, rates strengthened, with gains from Taiwan and on routes from Seoul to the US, although not to Europe. From India, rates increased to Europe but declined to the US compared with the previous week.

 European outbound rates were mostly stronger across major trade lanes, including routes to the US, China, Brazil, Mexico, India, Australia and South Africa. Rates to Japan were slightly lower, while those to the UAE also declined. The Frankfurt outbound index (BAI20) rebounded strongly, rising 19.8% week on week and standing 32.1% above last year's level. In contrast, the London Heathrow outbound index (BAI40) dropped 24.9% after recent gains and was 11.6% lower year on year. The decline was mainly driven by lower rates to the Middle East following the restoration of capacity, as well as weaker rates to North America and South East Asia.

From the US, outbound rates mostly increased, including on routes to Europe, the UK, China, Korea, Malaysia and South America. However, rates on the busiest southbound routes from Miami did not follow the trend. The Chicago outbound index (BAI50) rose 16.4% week on week and was 21% higher than a year earlier. Rates from Mexico to Europe eased slightly from the previous week but remained significantly higher than a year ago.