Airfreight rates stable in September as carriers add capacity

Airfreight rates on some of the world’s main trade lanes stabilised at an elevated level in September as carriers continued to slowly add cargo capacity.

The latest figures from data provider TAC Index show that average rates on services from Hong Kong to North America were up 52.9% year on year in September at $5.26 per kg.

From Hong Kong to Europe, the average rate was 31.6% up on last year to $3.37 per kg.

While these prices are far above 2019 levels, rates do appear to have stabilised — at least for the time being — compared with the second quarter when they soared by more than 100% year on year.

This came as there was huge demand to transport personal protective equipment and much capacity had been taken out of the market because of the grounding of the majority of passenger services.

Since then the urgency of demand has reduced, but load factors remain at a high level resulting in higher prices than a year ago.

September was also marked by a slow increase in capacity. Figures from WorldACD show that between the end of August and mid-September carriers increased capacity by around 5%.

Figures from another data provider, Seabury by Accenture, shows that total global cargo capacity was down by around 23% year on year in the first couple of weeks of September, which is an increase on the 26% reduction recorded during the prior two weeks.

Capacity on the transpacific is flat compared with a year ago, Seabury figures show, while from Asia to Europe there has been a 28% drop off.

Looking ahead, it remains uncertain how the peak season will progress given the condition of the global economy.

However, forwarders, at least, appear to be bracing for capacity shortages and over recent weeks several have announced plans for charter operations during the winter period in order secure capacity and avoid the potential for sky-high rates and supply chain disruption.