Air cargo rates decline below $3 per kg mark

29 / 06 / 2015

Air cargo rates are now at their lowest level for at least the last three years as weakening growth and overcapacity take their toll on airline performance.

The latest Drewry East-West Air Freight Price Index, published today, has revealed that prices are now at their lowest level since the index began in May 2012.

Rates on the 21 east-west routes covered by the Drewry report now stand at $2.91 per kg, while the index, which uses the May 2012 rate as a base level of 100, has now slipped to 89.8 points.

It is the first time Drewry's records show that prices have fallen below the $3 mark.

In its Sea & Air Shipper Insight analysis, Drewry said the decline was down to softening demand and overcapacity. It expects pricing to remain subdued over the coming months.

“Drewry’s East-West Air Freight Price Index declined another 3.4 points in May to a reading of 89.8, bringing the index down to its lowest level since it was first launched in May 2012.

“Compared to the same month last year the index was 12 points adrift, reinforcing the view of emerging market weakness precipitated by slowing demand growth and excess capacity.

“Drewry expects air freight pricing to remain weak over the next few months, as carriers release additional passenger capacity to cope with the Northern Hemisphere summer holiday season.”

Notes: This index is a weighted average of all-in air freight "buy rates" paid by forwarders to airlines for standard deferred airport-to-airport air freight services on 21 major East-West routes for cargoes above 1,000 kg.

Source: Drewry Sea & Air Shipper Insight