Airfreight rate growth plateaus in February

Airfreight rate growth on major east-west lanes appears to have plateaued in February as the cargo market has had a weak start to the year.

Figures from data provider Tac Index show that rates on the transpacific and the transatlantic both declined on year ago in February, while on Asia-Europe there was a slowdown in increases.

On services from Hong Kong to New York, Tac reported a 2.2% year-on-year decline in average rates in February to $3.54 per kg – the third month in a row that prices have been down on a year ago.

This is also down on the January figure, although this reflects normal seasonal trends.

However, rates on the trade are still up on 2017 and 2016 levels for the month, Tac data shows.

The Asia-Europe trade performed a little better with February rates increasing by 2.8% year on year to $2.61 per kg, although this level of improvement was behind the double-digit percentage improvements being registered in 2018 and the 5.6% improvement registered in January. Prices are also up on the amount recorded in both 2017 and 2016.

Rates on this trade are down on January levels, although this is again a reflection of normal seasonal trends.

On Frankfurt-New York services there was a 22.9% year-on-year decline in rates to $2.35 per kg, reflecting a weak start to the year in January.

The declines on transatlantic and transpacific trade lanes come as the air cargo market appears to have made a slow start to the year.

Both IATA and WorldACD noted decreases in cargo demand for January, while capacity continues to be added by airlines. Cargo load factors for January stood at 45.1%, IATA said.

As well as slower global economic activity, analysts also warn that trade tensions between the US and China are also affecting demand.