Transpacific airfreight rates decline again in January

Airfreight rates on the transpacific trade lane continued to come under pressure in January as contacts say that demand at the start of 2019 has been lacklustre.
Figures from Tac Index show that airfreight rates on services from Hong Kong to North America declined by 0.8% year on year to an average of $3.66 per kg.
This is the second month in a row that rates have been down on a year ago following on from 26 months of year-on-year increases. Prices were also down compared with December, although this is line with usual market trends at the start of the year.
The decrease comes as demand on the transpacific trade appears to have dropped off due to concerns about an escalation of the US-China tariff war, but it also reflects a generally slow start to the year for air cargo.
However, the year-on-year percentage decline has narrowed compared with the 5.1% fall that was registered for December.
The Asia-Europe trade performed a little better with January rates increasing by 5.6% year on year to $2.83 per kg, although this level of improvement was behind the double-digit percentage improvements being registered in 2018.
Rates on this trade were also down on December levels, although this is again a reflection of normal seasonal trends.
The forward curve from derivatives broker Freight Investor Services (FIS) for Hong Kong\China-Europe suggests that rates will pick up in March to around $3 per kg before slipping slightly to $2.95 per kg in April.
FIS brokers said that rates had not performed as badly as some had expected so far this year, “perhaps establishing a new baseline for air freight rates dictated by carrier sentiment rather than market demand/supply”.
“Price retraction on China-US baskets, and a slowdown of growth from China-Europe supports price buoyancy rather than demonstrating any significant decline,” brokers at FIS said.
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