Air freight rates climb as Middle East conflict disrupts markets

Global air freight rates continued to rise last week as the ongoing Middle East conflict disrupted markets, according to data from TAC Index. The global Baltic Air Freight Index (BAI00) increased by 5.1% in the week to April 6, taking its year-on-year gain to 15.8%. With jet fuel prices still high and supply tight in some locations, sources said a return to normal market conditions is unlikely in the near term, even if the conflict in the Gulf is resolved quickly.

Rates continued to increase week-on-week on key routes from China to both Europe and the United States, with prices now nearly 30% higher year-on-year in both directions. The index for outbound routes from Hong Kong (BAI30) rose 8.6% week-on-week, reaching 13.4% higher than a year ago, while outbound Shanghai (BAI80) increased 6.4% week-on-week, pushing its annual growth to 21.3%.

Strong weekly gains were also recorded on routes from Southeast Asia, including Bangkok and Vietnam. In contrast, rates from North Asia were more stable or slightly lower week-on-week on routes from Seoul and Taiwan, although they remained significantly higher year-on-year, particularly on routes to Europe. Spot rates from India have surged since the Gulf conflict began, leading to continued week-on-week increases in overall indices for shipments to both Europe and the United States.

From Europe, rate trends were mixed following recent increases. Prices rose further on transatlantic routes to the United States and on routes to Japan, Brazil, South Africa and the UAE, although these gains were supported by relatively low volumes. At the same time, rates declined on routes to China, India, Mexico and Australia. The index for outbound Frankfurt (BAI20) fell 2.1% week-on-week but remained up 6.1% year-on-year, while outbound London Heathrow (BAI40) edged down 0.3% week-on-week, though it continues to show a sharp annual increase of 48.8%.