News / Air freight rates continue to climb, with a strong peak season on the radar

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Air freight rates are continuing their climb, with the sector enjoying back-to-back monthly increases and year-on-year growth.

In Drewry’s latest East-West Airfreight Price Index, rates were up 1.9% in July, compared with June, and up around 1.5% against July 2016.

“In anticipation of a strong peak season, several forwarders have upped their capacity allocations out of Asia and have lined up charter capacity,” said Drewry. “We expect airfreight rates to further grow in August.”

Transpacific eastbound was the strongest lane, up 5% year on year to $3.83, a 2% rise over June, while westbound rates were up 4%, both year on year and against June’, to $1.69.

Carriers and gateways on both sides of the Pacific reported substantial growth, Cathay Pacific’s volumes up 14%, while Delta (19%) and United (17%) also saw significant upturns.

Similarly, Hong Kong, Shanghai and the US’s four largest cargo gateways all recorded a double-digit bounce in throughput, with Seoul (6.7%) and Tokyo (9%) trailing.

It wasn’t all good news though, as Asia-Europe traffic failed to make any headway and, in the case of eastbound trade, rates fell 1% month-on-month to $1.76 and 2% compared with July 2016.

That said, optimism remains, with IATA using its first-half analysis to remind the industry it had just experienced the best six-month period in seven years.

“The resurgence in air freight demand over the past year or so has been set against a stronger global economic and trade backdrop; this is particularly evident in signs of growing order books for global manufacturers,” said IATA.

“Indeed, the new export orders component of the global purchasing managers’ index remains close to a six-year high and, crucially, above the notional 50-mark that indicates rising orders.”

At current levels, IATA said, the increase would be consistent with year-on-year FTK growth in the region of 8% for the third quarter of 2017.