Airfreight rates continue to decline on key trades

Airfreight rates out of Shanghai continued on a downward trajectory last week as air cargo capacity on key routes remained steady.

The latest figures from TAC Index show that average airfreight rates between Shanghai and North America last week dropped by 29.6% compared with a week earlier to $7.62 per kg.

This is the third week in a row that prices on the trade have fallen as congestion at the airport has eased and cargo capacity has reached the same level as a year earlier.

However, prices are still far above last year’s levels when carriers were able to achieve $3.15 per kg.

Meanwhile, average prices from Hong Kong to North America continued to fluctuate, this week dropping by 13.7% to $6.73 per kg.

This time last year prices on the trade stood at $3.41 per kg.

Statistics from Accenture’s Seabury Consulting show that capacity from Asia Pacific to North America is 4% higher than the same week a year ago as more belly capacity comes into the overall market.

Meanwhile, on services from Shanghai to Europe, average prices also declined last week – although to a lesser extent than to North America.

TAC Index data shows that average rates on the trade were down 11.8% week on week to $8.65 per kg but are far above the $2.44 per kg average recorded last year.

From Hong Kong to Europe prices actually increased by 1.2% compared with a week earlier to $6.03 per kg.

The performance in rates to Europe reflects capacity on the trade, which is 8% down on a year ago.

While the capacity shortage ⁠— caused by the coronavirus-related loss of passenger services ⁠— is easing on the transpacific and Asia-Europe rates, space remains tight on many other lanes.

Transatlantic capacity, for example, is 60% down on a year ago westbound and 52% behind eastbound. South America-Europe is around 80% down in both directions, while South America to North America is 12% behind last year.

Overall cargo capacity is 26% down on a year ago.