The recent upward trend in airfreight rates on major Asia-outbound lanes, observed from August to September, is showing gradual continuity, according to pricing analysts.
However, the first week of November displayed minimal changes, according to the latest data from air cargo pricing monitor TAC Index, writes Thelma Etim. In the same week, the Baltic Air Freight Index (BAI) experienced a slight overall decrease of 0.5%, leaving its year-on-year (yoy) change at 28.8 per cent down – but with the ‘firmer tone’ of peak season generally continuing, a statement says.
Rates on key air cargo routes from China continued to rise, particularly on outbound Hong Kong, witnessing a 0.6% week-on-week increase. Rates from Shanghai also showed improvement by 0.5 per cent leaving its yoy change at minus 18.3 per cent, but with rates to the USA now down by only 4.5 per cent yoy.
Rates from Europe were more varied, with outbound Frankfurt declining but outbound London strengthening
“Outbound Frankfurt fell back by 6.1 per cent wow, leaving the yoy change at 50.2 per cent down, with a sudden sharp drop in third quarter profits at Lufthansa Cargo perhaps indicative of a market still in the doldrums. Outbound London was a little stronger after recent falls, rising by 1.5 per cent wow to leave the yoy decline at minus 56.9 per cent, boosted by higher rates to south-east Asia.”
Outbound Chicago was down by 3.5 per cent wow leaving its yoy decline at 42.1per cent down – though rates in general were rising from the USA to China, as well as from Miami to South America, it adds.
“Rates out of Vietnam fell back a little after some large gains in recent weeks that put them close to levels of 12 months ago. There was also a big wow increase with the latest Bangkok to Europe services adding to the data,” the statement concludes.
Bruce Chan, Vice President of the Transportation and Logistics sector at Stifel, highlights in his analysis that sequential airfreight rates witnessed a healthy increase from August to September on major Asia-outbound lanes, with the trend persisting into the current month. Notably, Hong Kong to North America and Shanghai to North America experienced approximately 13% growth, surpassing the rates of the previous month.
Comparing this to the average sequential seasonal uptick over the past five years, these figures stand out. Monthly rates for Hong Kong to Europe and Shanghai to Europe services also showed significant rises.
Chan remains cautious about muted demand and ample capacity, suggesting that while occasional tightening may occur, the overall peak season may not be noteworthy.
Neil Wilson, the TAC Index editor, echoes positivity in the outlook for air cargo demand, anticipating a favorable peak season, barring major geopolitical events.