Transpacific air cargo rate outlook clouded by tariff troubles


Airfreight rates on major trade lanes continued to show a mixed performance in May.

The latest figures from TacIndex show that on the Hong Kong-North America trade prices declined by 4.4% year on year in May to an average of $3.71 per kg.

The fact prices are down on last year should come as no surprise as it is the sixth month in a row that there has been a decline.

The drop on rates on last year reflects market demand – air cargo volumes on the trade lane began to fall in the final quarter of last year in line with weaker trade expectations and as the tariff dispute between China and the US began to take hold.

Forwarder Flexport said that the China-US tariff situation is clouding the market outlook and creating uncertainty.

It added that carriers are working on counter measures and some have already announced capacity cuts, while others introduced promotional rates in May.

It should also be noted that while rates are down on 2018 levels, they are still up on the figures recorded for the month in 2015, 2016 and 2017.

Rates are also slightly up on the level recorded in April which bucks the normal trend of prices being flat between the two months.

This could be down to the timing of Easter and there may have been some pick-up ahead of the latest round of tariff increases.

Meanwhile, on services from Hong Kong to Europe there was a 3.9% year-on-year increase to an average of $2.65 per kg.

This performance also reflects the year so far as prices on the trade have been up on a year ago despite demand showing signs of weakness.

Prices were also flat on April, reflecting normal seasonal trends. Looking ahead, rates on this trade lane tend to creep during the second and third quarter before increasingly strongly in the last part of the year.




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