A mixed picture for rates as air cargo shows some signs of a pick-up
05 / 04 / 2019
Airfreight rates on the transpacific trade are expected to begin picking up over the coming weeks after hitting their low point for the year.
The latest data from Tac Index shows that average prices between Hong Kong and North America stood at $3.38 per kg in March.
However, derivatives broker FIS said that the China-US market reached its base at the end of March and since then has shown a “clear rebound into positive territory”.
This view was re-iterated by forwarder Flexport, which said this week the market from Hong Kong had picked up, especially to the US east coast. The ex-China market also showed similar signs of life, although there were no space issues to report from either origin at the moment.
Over the last couple of years rates on the transpacific have tended to start picking up around March-May following the post-Christmas and Chinese New Year slump.
When comparing to last year, however, average rates on the trade lane are 7.4% down, a reflection of a weakening of demand since a year ago.
Meanwhile, the Hong Kong-Europe trade showed the opposite trend as March prices were up 7% year on year to $2.61 per kg but flat compared with February.
FIS said that rates were weakening on the trade lane despite market feedback suggesting that volumes were on the rise. Flexport concurred, stating that the market to Europe is picking up out of both China and Hong Kong.
Rates on services between Asia and Europe tend to start increasing around March-April.
While there is a mixed picture on the two trade lanes compared with a year ago, it should be noted that prices on both routes are up on the levels recorded for March in both 2016 and 2017.
Meanwhile, the transatlantic trade lane continued to struggle compared with a year ago. Prices on services between Frankfurt and North America in March were 21.6% down on a year earlier.
“The transatlantic trade continues its unpredictably volatile price levels represented in a dramatic drop that is now standard for the lane,” FIS said in its weekly market commentary.
However, they are up on a month earlier which is normal at this time of year as carriers reduce capacity during the slower winter months for passenger transport.