Airfreight rates down 40% for 4th consecutive month

The general global air freight spot rate declined at a hastening pace of 40 percent or more for a fourth consecutive month.

CLIVE Data Services, part of Xeneta: Shippers will hold upper hand in airfreight rates negotiations after another month of falling demand in July saw volumes drop 2% YoY.

Many shippers are already relaunching contract negotiations with their logistics service providers.

Last month saw global air cargo capacity recover by +7 percent compared to a year ago, as airlines’ summer schedules stepped up to meet heightened passenger traffic.

The July global average dynamic load factor was at 55 percent, on par with June 2023 but -3 percent pts below the level of a year ago.

The 41 percent drop in July versus the same month in 2022, pushed the average air cargo spot rate down to $2.20 per kg. This compares to a rate of $2.31 per kg recorded in June.

Niall van de Wouw, Xeneta: “Shippers are also looking to agree longer, 12-month commitments to reduce their costs. Airlines will know they can expect the same pricing turbulence from forwarders.”

Northeast Asia (including China) trade lanes registered the biggest rate declines compared to last year. Both China to the US and US to China airfreight spot rates fell 60+ percent from a year ago.

China to Europe and Europe to China took the third and fourth places, with spot rates down over 55 percent year-on-year.

The key question for all stakeholders monitoring the global air cargo market demand is: ‘how low will it go?’

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