Airfreight rates slide as 2023 draws to a close

The last few weeks of 2023 saw airfreight rates start to fall as demand eased after the peak season.

The latest figures from the Baltic Exchange Airfreight Index (BAI) show that in December all-in rates paid by forwarders (contract and spot) from Hong Kong to North America increased to $7.10 per kg from $6.15 per kg in November.

This was the highest level recorded in 2023 and compared with last year rates on the route were up 9.2% in December.

However, prices fell rapidly in the last couple of weeks of the month and ended up below $6 per kg.

It was a similar trend from Hong Kong to Europe where average rates for December ended up at $5.36 per kg compared with $4.64 per kg in November – the highest level of the year.

Compared with December 2022, Hong Kong-Europe rates were down 2.9%.

However, prices also fell on this trade as the month ended and were below $4.50 by the end of the year.

Declines in rates aren’t too unusual at this time of year as the industry enters the lull between the end-of-year peak and the Lunar New Year holiday, which in 2024 takes place on February 10.

The falls experienced on these trades at the end of the month mirror performance overall with data provider TAC Index reporting that the overall Baltic Air Freight Index “suddenly fell” by 20.5% over the two weeks to 1 January.

“The sudden drop was heavily skewed by falling rates out of China, with every lane tracked from Hong Kong and Shanghai heading lower,” TAC said.

“Sources suggested the sudden drop probably reflected a drop in spot market volumes – leaving a higher proportion of business conducted at previously agreed (lower) contract levels. Rates from elsewhere in Asia were not falling so much WoW – and indeed higher on lanes to Europe from Vietnam, Bangkok and India.”

TAC added that rates from Europe were steady while out of the US they were declining, although they were slightly firmer on the transatlantic.