Asia-Europe air cargo rates close in on 2018 levels in November

Airfreight rates on the Asia-Europe trade closed in on 2018 levels in November, but transpacific prices for the month still lag behind a year ago.

The latest figures from TAC Index show that in November rates on services from Hong Kong to Europe declined by 3.3% year on year to $3.26 per kg, an improvement on the 8.7% decline drop in October.

Prices on the trade also increased rapidly from the $2.82 per kg recorded in October, reflecting a pick-up in demand on the trade for the peak season.

Meanwhile, rates on the transpacific trade lane remain far behind a year ago as the US-China trade war continues to take its toll on demand.

TAC Index figures show that rates on Hong Kong-North America services were 28.5% down on a year ago at $3.84 per kg – the biggest percentage decline recorded on the trade since May 2016.

There was a slight pick-up on the $3.49 per kg registered in October, but this 0.35 cent increase lags on the level of improvement recorded between the two months in 2015, 2016, 2017 and 2018.

The translatlantic trade continued to struggle during the month: rates in November are 28.9% down on a year ago at $1.75 per kg and are also behind the $1.82 per kg recorded in October.

Commenting on rate performance at the end of November, air cargo derivatives broker Freight Investor Services said: “the general consensus that Q4 2019 is a damp squib holds true for at least one major trade route – the impact of the trade war that has restrained transpacific airfreight and shipping is poignantly demonstrated by the premature decline of Asia-US prices.

“However, it appears trade into Europe from China has found another gear, possibly linked to a combination of an open trade window, abundance of competing freight carriers, the urgency and chaos provided by Brexit, and inventory stocking thanks to good old fashioned European Christmas consumerism.”