Transpacific airfreight rates climb in April

Airfreight rates from Hong Kong to North America took off in April as a combination of capacity shortages and rising demand hit the market.

Baltic Exchange Air Freight Index (BAI) figures show that in April the average price on services from Hong Kong to North America increased by 54.7% compared with a month earlier to $8.48 per kg.

While some seasonal uplift in pricing is expected at this time of year, this is far above the increases recorded in 2018 and 2019 (last year was affected by the PPE crisis).

Peter Stallion of air cargo derivatives broker Freight Investor Services (FIS) said this was in part driven by Cathay Pacific reducing cargo capacity from Hong Kong due to stricter crew quarantine rules, which have since been relaxed.

Bruce Chan, vice president of global logistics at investment bank Stifel, said that the increases were also felt on services from Shanghai to North America.

He said a wave of consumer spending in the US – supported by government stimulus programmes – and low inventory levels was driving the rate increases.

On services from Hong Kong to Europe, prices in April also increased compared with a month earlier, although not to the same extent as the on transpacific and more along usual seasonal lines.

BAI figures show that rates in April from Hong Kong to Europe increased by 13.8% compared with March to $4.61 per kg.

Stallion said that rates on the trade are in part driven by the Suez Canal blockage in March.

Looking forward, Chan said that carriers could divert capacity from Asia-Europe to the transpacific to chase higher prices, which has the potential to then drive up Asia-Europe rates.

Meanwhile, April average rates from Frankfurt to North America declined by 7.2% on March to $4.13 per kg. However, prices remain elevated.

Stallion said that this is driven by vaccine cargo and a persistent lack of passenger volume.