Global air freight indexes suggest that freight rates may not only be stabilising, but even rising on some routes and while there is no evidence of any significant peak the market is definitely tighter in the final quarter, with stabilisation in global rates and tonnages following China’s Golden Week.
Market data for week 42 shows a 1% increase in global tonnages, which followed a 4% week-on-week recovery the previous week and reversed the drop triggered by China’s Golden Week holiday break.
Air cargo space from China to North America is in short supply as strong eCommerce demand outstrips the slow return of passenger flights and the essential belly cargo capacity they add, with rates rising in the first three weeks of October.
Trans-Pacific load factors were at 89% in the first half of October, which is close to the same levels seen at the peak of the pandemic and means that any sudden increase in demand will see space squeezed very quickly.
The major eCommerce companies in China are buying up space, with November online shopping promotions looming and much of any available air cargo space will go towards moving sales from China’s Singles Day, Black Friday and Cyber Monday in the US.
While overall global tonnages, rates, and capacity increased, the regional picture is more mixed, with notable increases recorded on Europe-Asia Pacific (+11%) and Middle East/South Asia-Asia Pacific (+8%).
Intra-Asia Pacific tonnages also rose strongly, up 11%, with modest tonnage and rate increases (+2%) on the big markets ex-Asia Pacific, to North America and Europe.
TAC’s Baltic Air Freight Index noted that the week to 23 October experienced a 2.8% increase, helping to further reduce the year-on-year decline to 33.7% and suggested the figures were evidence of a bounce, pointing to firmer pricing out of China.
Outbound routes from Hong Kong gained a further 2.7% week on week, to trim its year-on-year decline to only 19.2%, with rates rising to Europe as well as to North America, TAC said.
Outbound Shanghai was up even more strongly, by 4.1% week on week, to leave its year-on-year fall at 27%, mainly driven by the rising rates to North America, with rates to Europe sliding.
Rates from US to China overall were rising strongly, but the biggest rises on the week were out of Vietnam – with rates rising very sharply week on week on the strength of spot demand both to Europe and the US.
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