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Airfreight rate changes in July were “muted” as the air cargo market low season continued.
Figures from the Baltic Air Freight Index (BAI), calculated by TAC Data, show that global airfreight rates in July increased by 4% compared with a month earlier and were down around 1.8% year on year.
BAI July figures for services from Hong Kong to North America show rates - a combination of spot and contract - increased by 2.4% on June to $5.11 per kg and were down 10.7% year on year.
From Hong Kong to Europe, there was a slight 0.7% increase compared with June to $4.39 per kg, while rates on the route are 2.4% down on a year ago.
TAC editor Neil Wilson said the flat rates reflected the quieter summer months. However, supply chains are still being adjusted as companies anticipate US tariff changes and the end of the de minimis duty exemption on 27 August.
”The relatively muted movement in rates was not unusual for a period when air cargo often enters its ‘low season’," said Wilson.
"Typically, extra capacity gets added in the bellyhold of passenger planes at this time of year, with more planes flying as people take summer holidays, particularly on Transatlantic routes. This extra capacity tends to help keep overall rates down.
"The extreme uncertainties at the start of this year – on the outlook for tariffs and trade – have clearly abated to a significant extent. Nevertheless, sources were still reporting an ongoing reshuffling of supply chains by shippers and capacity by carriers between different lanes."
As a result, Wilson said there was considerable variation in price patterns through July between different lanes and outbound locations.
"That said, on traditionally the busiest lanes in the market from China to the US and to Europe, there was relatively little movement in rates," he added.
While rates out of China were static in July compared with June, Wilson said the "relative strength" of pricing reflected shippers moving cargo to the US early to try and avoid any possible escalation in the trade war between the two countries.
Meanwhile, freighter capacity has also been moved out of the market to other lanes such as from Vietnam, Thailand and Malaysia.
Earlier this week, data provider Xeneta reported that the airfreight market had registered a surprise demand increase of 5% in July due to frontloading and more shippers sending their goods by air to avoid the impact of tariffs.
