Airfreight rates slide in line with Lunar New Year holiday demand decline

Airfreight rates began their Lunar New Year holiday decline last week after rising in the first six weeks of the year.

The latest figures from TAC Index show that last week overall airfreight rates slipped by 8.2% compared with the week before and are down 21.2% from a year ago.

“Despite ongoing disruption to ocean shipping in the Red Sea and congestion leading to the suspension of business in certain locations such as Dubai and Bangkok, the overall decline last week was not surprising as air cargo volumes out of China fell sharply during the Lunar New Year holidays,” TAC Index said in a weekly round up.

Prices out of Hong Kong were down 13% compared with a week earlier, while Shanghai was down 11.5%.

Both are also down on a year ago, with Hong Kong slipping back into negative territory at a decline of 8.3% and Shanghai down 5.4% year on year.

There were some bright spots though. TAC said that rates out of India were on the up which may indicate some shippers utilising airfreight in response to ocean shipping issues.

The decline doesn’t come as too much of a surprise as demand levels tend to taper off when factories in Asia close for the two-week holiday, which this year started on February 10.

The rest of the year has been marked by a strong rise in airfreight rates as the industry faced the usual pre-Lunar holiday rush and some shippers utilised sea-air solutions to combat the delays caused by the Red Sea crisis.

The rise in demand resulted in cargo handlers dnata in Dubai and BFS in Bangkok introducing short-term embargoes on import cargo.

However, there is an expectation that the air cargo market will cool following the Lunar New Year break.

Scan Global Logistics recently commented that it does not expect the demand levels of the first few weeks of the year to be sustained.

“Our assessment remains that the development in recent weeks more so pertains to a last rush ahead of the Lunar New Year, and not least the effect from Red Sea delays, prompting shippers across Europe and US to utilise airfreight to avoid empty shelves and stock-outs,” the company said.

Analyst WorldACD is also predicting a slowdown. Its figures show that in week six, tonnages out of China declined by 2% compared with the previous week while imports were down 15%.

This slowdown follows a “recent surge” in cargo volumes out of China as shippers “rushed to get goods shipped before the LNY holiday”.

And WorldACD expects both inbound and outbound tonnages to fall further.

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