More signs of a ‘firmer’ air cargo market
26 / 09 / 2023
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There were further signs that the air cargo market was firming up last week after more than a year of demand declines.
The latest weekly figures from data provider TAC Index show that the overall BAI airfreight rate index last week increased by 4.8% on the previous seven days.
Meanwhile, the year-on-year decline last week narrowed to 38.5% compared with 44.4% in the previous week.
TAC Index said there was a “distinctly firmer tone” in air cargo markets.
“With sources also reporting solid pre-order bookings for some major product launches, including the new iPhone, expectations are growing for a proper peak season bounce this year and a stronger market through into the first quarter,” the data provider wrote in its weekly market report.
The report stated that rates were firmer out of China in the run-up to Golden Week, with the index for outbound Hong Kong routes rising 2.1% week on week.
The improvements out of China come amid speculation that “some forwarders – particularly on the e-commerce side – who have not secured sufficient capacity yet may be left scrambling and forced to pay higher rates in the coming weeks”.
Rates out of Shanghai increased by 5.9% last week with improvements to both North America and Europe.
Freight forwarder Flexport also reported a pick-up in demand last week, particularly out of Asia.
“Overall market demand for airfreight capacity is on the increase — particularly from Asia to the US and Europe,” the forwarder said.
“Southeast Asian countries such as Thailand, Vietnam, Singapore and Malaysia are most impacted with surging demand levels due to consumer electronics and semiconductor production.
“At the same time, China and Hong Kong are experiencing rising demand levels due to e-commerce activity and New Product Introduction.
“Because all of this volume routes through 3 primary export gateways in Asia—HKG, PVG, and TPE—capacity is impacted resulting in extended transit times and rising rate levels.”
Is the air cargo market finally showing signs of improvement?
