Airfreight prices jump in July, but rate of improvement narrows

Airfreight rates climbed again in July as volumes continue to soar and forwarders anticipate a strong peak season, but the rate of growth has narrowed.
The latest Sea and Air Shipper Insight report from consultant Drewry shows that the average all-in buy rate across 28 major east-west lanes reached $2.64 per kg*, an increase of 1.5% against last year.
The figure is also up on June, when forwarders were paying an average of $2.59 per kg, in what is generally a fairly flat period.
While the increases in rates will be welcomed by air cargo carriers, the improvements continue to lag behind demand growth, which according to IATA stands at 10.4% in freight tonne km terms over the first six months of the year.
The growth rate has also narrowed; over the first six months rates were up by 7.9% compared with a year earlier.
However, there is hope that the peak season could lead to improved rates as forwarders up their capacity allocations.
“Drewry’s East-West Airfreight Price Index continued its upward trajectory in July, an increase of 1.9% month-on-month, and about 1.5% above the same month last year.
“In anticipation of a strong peak season, several forwarders have upped their capacity allocations out of Asia and have lined up charter capacity. Drewry expects the airfreight rates to further grow in August.”
The figures reflect those of the TAC Index, which also showed an improvement, particularly on transpacific trades while improvements on the transatlantic slowed considerably.
Contacts suggested the transatlantic rate slowdown was caused by extra capacity being added to the trade for the peak vacation season.
*Drewry added seven port pairs for the index generation this month and as a result all the rates are re-based according to this.
View airfreight rate data from Tac Index