News / Airfreight spot rates soften – but will traditional Q4 lift arrive?

© Jaromír Chalabala

Airfreight spot rates to Europe offered by Chinese forwarders have fallen again, following a pre-Golden Week rise. 

Rates from China to Europe dropped 4% in the past two weeks, but remain 1.5% higher than in mid-September, and in a pre-Golden Week surge, average rates rose by ~5.7%, between mid-September and the 26th.  

In Europe, the most volatile price destination from China, according to spot rates offered by forwarders, is Prague. It saw the biggest rise in rates, more than 44%, from mid to end-September, while in the past two weeks it has fallen 40% in the highest weight category. Other destinations remained in the 5% to 7% range. 

Prague, reportedly cheaper and with more capacity available than major hubs, has been active in China-Europe air cargo as an alternative for carriers, including Air China, China Cargo Airlines and belly operator Hainan Airlines. It is also popular because of its easy trucking access to Germany, Austria and Poland. 

Meanwhile, global freighter capacity in the past 72 hours, versus a week before, has dropped 8%, according to Rotate’s live capacity database. Asia Pacific to North America has fallen a sharp 17%, or 5,000 tonnes, while on the westbound route it is down 14%.

In fact, in the past 72 hours Asia origin has fallen everywhere: to the Middle East, capacity is down 10%; to Europe, it is down 12%; and intra-Asia is down 14%. 

While this could be related to the halt in factory production during Golden Week, there are other drops, such as Latin America to Europe, which is down 18%. The biggest freighter capacity gains, meanwhile, were Africa to Europe, up 30%, and 19% up southbound. 

Freighter capacity during Golden Week, up to 5 October, was equal to the space offered in the average of the previous four weeks. TAC Index noted this week that global airfreight rates to 6 October had edged up 1.9%, with Shanghai outbound up 1.3% week on week, and 1.5% from Hong Kong. 

Interestingly, outbound Chicago fell another 1.8% week on week, leaving it nearly 30% down year on year and at its lowest level for two years. 

So what does this mean for a peak season – or not? Towards the end of this month, airfreight rates would normally be expected to firm again, especially as airlines switch to winter schedules and belly capacity reduces.

Based on previous years, rates should rise about 3% and 8% from early October to mid-November.  

But as we all know, this year is not any old year.