Monthly airfreight rates stable in February on key trades

By Damian Brett

Average monthly airfreight rates on key trade lanes were largely static in February compared with a month earlier but remain well above last year’s levels.

The latest statistics from Baltic Exchange Air Freight Index (BAI) show that average prices from Hong Kong to North America in February reached $6.42 per kg, which is flat when compared with January. However, compared with a year earlier, average rates on the trade were up by 101%.

Prices on the trade have been tracking more than 100% up on the year-ago level since November as a result of lost belly capacity and a gradual improvement in demand since the start of the Covid-19 crisis.

That improvement in demand has been particularly noticeable on the transpacific trade as a result of a resurgence in US retail spending.

Airfreight rates on services from Hong Kong to Europe followed a similar pattern. Average February prices reached $4.40 per kg compared with $4.28 per kg in January.

Against a year ago average rates on the trade lane are up by 70.6%. This lags behind the year-on-year increases registered to North America, but European consumer demand has not rebounded to the same extent as it has in the US.

On services from Frankfurt to North America average rates in February were up by a few cents compared with January levels at $4.52 per kg, but had increased by 146% compared with a year ago.

Year-on-year comparisons at this time of year are affected by the timing of the Chinese New Year and last year was also a leap year.

However, broadly speaking, rates at the start of the year tend to gradually decline from the November/December peak, slowly start to recover in the summer and then quickly ramp up later in the third quarter before eventually peaking in the fourth quarter.

This year the market is more dynamic with the supply/demand ratio more finely balanced. While this volatility is not reflected in the average monthly prices, its effect on rates can be seen when looking at week-by-week changes in pricing.

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