Asia-Europe airfreight rate growth shows signs of slowing
12 / 05 / 2020
By Damian Brett
Airfreight rate increases between Asia Pacific and Europe showed signs of slowing down last week as coronavirus lockdown measures began to be eased.
Data from TAC Index shows that last week average airfreight rates from Shanghai Pudong to Europe declined by 4.5% on a week earlier to $9.98 per kg.
This is the first decline on the trade since February 24, but prices are still far above the $2.47 per kg achieved for the week last year.
On services from Hong Kong to Europe there was a 3% week-on-week decline to $5.80 per kg. The last time prices on this trade declined was on April 13. Prices for a year ago stood at $2.65 per kg.
Meanwhile, on services to North America prices continued to rise. From Hong Kong there was a week-on-week increase of 3.5% to $8.47 per kg and from Shanghai to North America there was an 11% jump to $11.71 per kg.
Derivatives broker Freight Investor Services (FIS) suggested the decline in prices to Europe mirrored general market conditions – with less urgent demand as lockdown measures on the continent begin to be eased and extra cargo capacity coming into the market.
The broker said the market outlook for the coming months remained uncertain.
“The drivers for these price movements have been in direct correlation with underlying volume and load factor data, and the general progression of lockdown policies by European governments,” FIS said.
“Most European nations have begun their lockdown easing procedures, some more confusing than others.
“The key trend for all of us to watch will be the return (or not) of consumer spending, as warehouses sit full to the brim with inventory.
“Hand-in-hand is a rapid return of passenger capacity, Lufthansa has already aimed to double its active fleet by June, sucking the life out of the forward price on which many existing cargo-schedules are reliant.”
Freight forwarder Agility said that carriers had been increasing capacity on both the transpacific and Asia-Europe trade lanes over recent weeks.