Transpacific air cargo rates pick up in August as firm demand continues
30 / 08 / 2024
Source: Jaromir Chalabala/Shutterstock
Air cargo rates on the transpacific trade picked up in August as the busy market conditions continued and companies begin to eye what is expected to be a strong peak season.
The latest figures from the Baltic Exchange Airfreight Index (BAI) calculated by TAC Index show that rates from Hong Kong to North America in August increased to $5.96 per kg from $5.72 per kg a month earlier, while they are up 22.9% on a year ago.
Prices on the trade also continued to rise as the month progressed and by the end of August had breached the $6 per kg mark.
On the Hong Kong to Europe trade rates decreased slightly in August compared to July, falling to $4.43 per kg compared with $4.50 per kg a month earlier.
However, they remain well above last year’s levels with a year-on-year improvement of 21.4% for August.
TAC Index described current market rates as firm: “The latest numbers confirm that the firm tone of the market over the summer – when prices usually dip ahead of peak season – has continued.
“Sources are divided about whether peak season arrived early – or whether there is a further surge to come due to limited capacity.”
The increases come as the air cargo market benefits from modal shift due to Red Sea crisis creating lower reliability in container shipping, the continued surge in e-commerce demand and some suggesting concerns over a possible capacity shortage in the peak season has resulted in shippers moving goods early to mitigate disruption.
In a recent webinar, Tiaca and Xeneta urged shippers and forwarders to plan now for the peak season given the current market conditions and the possibility of strikes at US east coast terminals in October.
Niall van de Wouw, chief airfreight officer at Xeneta, said: “We see that flights are already full on many lanes, we see elevated rates. If we look at the strikes that might be heading our way on the port side, there is no resolution in sight on what is happening in the Middle East, the reduction of belly capacity towards the end of the fourth quarter, and you add it all together, you have a toxic mix of overheating towards the end Q4.”
Meanwhile, rates from Frankfurt to North America also began to pick up in August, reaching $2.05 per kg compared with $1.92 per kg a month earlier.
They were down slightly on last August but by the end of the month had just about breached the year-ago level.
Prices on the transatlantic tend to dip over the summer as airlines add capacity for the tourist season but there are expectations of a pick-up in the final quarter as aircraft are removed from the trade.
Freighter capacity has also been re-positioned to the Asia market as carriers look to capitalise on the high rates and demand from that region.
Freight forwarder Flexport recently commented that rates would rise in the coming months on the trade.
