News / Airfreight rates level out, but looming turbulence could see prices rise again

© Andrew Angelov |

Airfreight rates on transpacific routes have flattened as an overshot of capacity eclipses demand, but predicted supply chain turbulence could see prices take off again soon.  

The global average rate growth of 2% – to $2.79, the highest level recorded this year – was driven by increasing spot rates “mainly from North America and Europe origins”, according to World ACD’s week 47 data.  

While this may seem surprising, the data company explained that this was due to a capacity shift from the transatlantic to the Asia Pacific region, with airlines “anticipating a surge of shipments from mainly China and Hong Kong to Europe and North America”. 

Instead, global tonnage this week remained flat from the week before. 

But while average rates from Asia Pacific to North America flattened week on week, World ACD data showed rates from Europe to North America “increasing significantly”, up 8% week on week. Year on year, however, ex-Asia Pacific to North America is still up 10%.  

According to market intelligence company Rotate’s database, capacity from Asia Pacific to Europe was up 7% month on month, and up 4% Asia to North America. Europe to North America capacity was down 4% across the same period.  

Year on year, World ACD noted, capacity on the transatlantic over the past three weeks was down 3%, “fully driven by 10% less freighter capacity, as belly capacity remained stable”.  

YoY from Asia Pacific to North America, capacity has grown by 7%. 

World ACD added: “Also, more forwarders than last year secured their capacity before the peak season, which has a dampening effect on the rate development pattern we saw last year, and which was more typical for the tradelanes ex-Asia Pacific this season.” 

Indeed, Kathy Liu, VP of global sales and marketing at Dimerco Express Group, said: “Ecommerce platforms had already secured capacity earlier in Q4 with direct support from airlines, leading to lower shipment volumes compared with the same period last year.” 

But she added that the air freight market had “again started gaining momentum from 18 November”. 

“December is expected to be busy during the first two weeks, driven by Black Friday sales, but starting in week 51, the market will likely slow as the traditional holiday season begins,” said Ms Liu.  

However, Dimerco also warned that potential cost increases due to threatened tariffs in the US could prompt companies to ramp up inventory, likely to “drive a significant increase in air freight activity… potentially leading to tighter space and higher shipping rates”. 

Indeed, head of airfreight at DSV Stefan Krikken said at TIACAs Air Cargo Forum in Miami this month: “These tariffs will happen… You will see supply chains changing. It means supply chain disruption, which means more conversions from ocean to air freight.  

“We’re seeing more and more demand being pushed into South-east Asia and, with these tariffs, that’s only going to be more…  I think people will continue to consume, and whatever disruption you have in supply chains will be good for our business.” 

But Dimerco noted that, despite the production shift to South-east Asia likely increasing raw material imports from China and finished goods exports to the US, “South-east Asian countries will still rely on major transit hubs like Taiwan, Hong Kong, South Korea and Japan, particularly for airfreight to the US”.  

“To adapt to these changes, carriers may adjust their pricing strategies next year,” it concluded.