News / Airfreight's 'mini peak' may see rates to the US fade, but Asia stays strong

Flooding in southeast Asia is impacting trucking. © Thor Jorgen Udvang from 2011

The ‘mini peak’ in air cargo could fade slightly as the US moves into Thanksgiving, with global rates down, according to both TAC Index and Freightos FAX – but Asia continues to be strong, despite flooding. 

“The global Baltic Air Freight Index … dipped 1.5% in the week to 24 November as the first phase of peak season in the run-up to Thanksgiving in the US came towards an end – but leaving the index still slightly higher, by 0.3% YoY, from where it was 12 months ago,” it said.  

Freightos saw a more significant fall, of nearly 10%, in its global FAX, which has dipped from $2.75 last week to $2.46 today. 

TAC’s rates from both Hong Kong and Shanghai slipped, down 1.4% and 0.2% respectively. But out of Taiwan and Seoul, rates were “significantly higher”. 

TAC Index added that rates out of Bangkok, particularly to Europe, were up “strongly”, but stayed flat out of Vietnam. 

Vietnam, Thailand and Malaysia are currently suffering severe flooding, impacting road and port services. One European air freight forwarder said they were looking at some alternative routings, including via China, and added that there was also uncertainty in the region, in particular concerning the Thai-Cambodia border, where tensions have reignited.  

“It is impacting some cargo moves, and there are some backlogs. I think it will have an impact on volumes and rates.” 

While there have been few public announcements on the impact of the floods, PostNl said there was a delivery delay in Thailand of up to three days. Kuehne + Nagel put out an advisory yesterday on its SeaExplorer site saying: “Severe flooding across seven Malaysian states – Kedah, Kelantan, Penang, Perak, Perlis, Terengganu, and Selangor – has displaced thousands of families and caused road closures, disrupting container traffic to Port Klang. Requests have been made to extend timelines for laden container returns. Authorities continue monitoring as heavy rainfall persists.” 

Airfreight rates out of South-east Asia to Europe have risen in the past week, according to Freightos Terminal, from $3.43 per kg to $3.75 today, a rise of more than 9%. However, South-east Asia to North America has dipped in the past week, falling from $5.76 to $5.44, despite steadily rising since mid-October.

However, Greater China to North America has been on the rise since mid-October, up nearly 30%, from $5.14 to $6.64. 

One Asia-based forwarder said they had seen a significant pickup during the negotiations between China and the US, with a 1 November deadline, explaining: “In October, there was a ramp-up of volume trying to beat that November deadline.

“We see the volume of freight, and obviously we’re not clear as to whether it’s happening because of front-loading or because of other reasons, like customer demand in general. But we saw that ramp-up of freight, so we assumed it was front-loading.  

“But now if I look at November as well, it’s still going quite strong for us; we’re still seeing something of a mini peak season, even at the tail end of November, those volumes are still there.” 

Meanwhile, out of Europe, TAC Index said rates were rising on routes to the US, China, Japan, Australia, Mexico, and the UAE.