Airfreight rates on the up in August

Air cargo rates on some of the world’s busiest routes began to pick up again in August while the outlook remains uncertain.

The latest figures from Tac Index show that prices on services from Hong Kong to both North America and Europe increased in August compared with both a month earlier and a year ago.

Rates on services to North America reached $5.50 per kg in August, which is up on the $4.96 per kg recorded in July and also on $3.29 per kg achieved 12 months ago.

On services from Hong Kong to Europe, average rates for August stood at $3.21 per kg, which is higher than the $3.17 per kg carriers charged in July and the $2.56 per kg of last year.

Looking at performance on a week-by-week basis, prices peaked in the middle of August before heading back down towards the end of the month.

However, price changes do seem to have stabilised somewhat compared with previous months of the year when urgent demand for personal protective equipment met capacity limitations as a result of cuts to passenger services.

Looking ahead, the market appears to be unsure what to expect for the rest of 2020. At some stage it is expected that there will be another bout of urgent demand when a Covid-19 vaccine is ready for distribution.

Meanwhile, the capacity situation is uncertain given the unknown future of passenger operations and there will also be the usual peak season increase in demand.

Air cargo derivatives broker Freight Investor Services said in its weekly wrap up that airlines are booked up for the final quarter of the year, apart from the capacity they are holding back for the spot market.

Meanwhile, prices from Frankfurt to North America also continue to track ahead of last year. The latest data shows that rates on the trade are 86.1% up year on year at $4.02 per kg.