News / Airfreight rates ex-Asia still rising, but 'no drama' in a better prepared market

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Forwarders and data providers are reporting increasingly high airfreight rates out of Asia, expected to hit a new level at the end of November. But the market is not anticipating a ‘crazy’ peak. 

Worldwide, air cargo spot rates rose 5% in the last week of October, from a week earlier, with origin Asia Pacific up 3%, Europe up 7% and Central and South America up 8% – although global tonnages remained flat, according to WorldACD. 

Spot rates are now 22% above where they were last year – but 27% higher from Asia Pacific, while Middle East and South Asia rates are up 78% year on year. 

One Shanghai-based forwarder told The Loadstar: “Rates have been pushing up each week. There is some congestion, but not the worst [we’ve seen]. There is about a week between booking and delivery. 

“Airfreight rates will continue to go up in the next few weeks, I reckon it will reach about $7 per kg to Europe. The peak will likely last to the end of November.” 

The forwarder estimated that about 55% of volumes were ecommerce, adding: “There is some hi-tech, but not as much as there used to be.” 

The forwarder added that it was a challenge to cope with “the ever-changing spot rate”. But Niall van de Wouw, head of airfreight at Xeneta, said the industry was getting better at mitigating volatility. 

“What we are seeing in the air cargo market is a compliment to the increasing ability of shippers, freight forwarders and airlines to manage disruptions and process these kinds of volumes without as much drama around spiralling rates. Over the long-term, this is better for everybody. 

“There is a maturity in the market, which stems from airlines being better prepared this year as well as there being clearer rules in place between shippers and forwarders, and forwarders and airlines. This is good for relationships – and good for consumers.

“Rates are still elevated versus a year ago, but despite strong demand, rising load factor and only a modest increase in supply, they are not going crazy. Lessons have been learned and people are looking for healthy, reasonable rates on both sides.” 

Cathay Cargo agreed that the market looked manageable. Wendy Ge, head of cargo Chinese mainland, said today: “In the summer, we were anticipating a very busy peak period and there was a lot of procurement of advance peak space agreements, so it was a bit of a surprise to see not much of a spike in demand immediately prior to Golden Week. But we feel there were some other factors at play.

“These included a degree of overcapacity from freighter charters secured in advance by some of the big ecommerce giants, which removed some of the impetus of an ad-hoc pre-Golden Week surge.  

“We remain busy. In terms of the wider industry picture, the peak continues and, by the start of October, air cargo recorded nine consecutive months of year-on-year growth.” 

Tonnages in week 43 from Hong Kong to Europe were up 30%, compared with early August, and up 29% year on year, said WorldACD. 

“But several other significant Asia Pacific markets recorded strong WoW tonnage growth to Europe in the past two weeks, notably Taiwan (+32%) and Thailand (+30%). Spot rates from Hong Kong to Europe rose a further 3% in week 43, to $5.33 per kg, their highest level this year, and an 18% increase compared with last year.” 

Asia to the US, however, is a little muted – tonnages are about 20% below September levels, and year-on-year levels. 

Spot rates are 39% higher than last year, at $6.41 per kg, while from China to the US, rates are at $5.13, 14% higher than last year.