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Airfreight rates have fallen to their lowest level since the pandemic began, according to the latest figures from both Xeneta and Tac Index. And signs of a peak have all but vanished, according to Clive Data Services.

Xeneta noted that the global rate was $2.19/kg in August, with chargeable weight declining for the fourth consecutive month. Tac Index data shows major tradelanes all flatlined in the past week – with the exception of China-Europe, which fell 2.2% to $3.09/kg.

Global capacity in August jumped 7%. While the dynamic load factor rose one percentage point month-on-month, it was down some 3% on last year.

According to one Chinese master loader, however, there could be pockets of rate rises. It told The Loadstar rates could go up following the cancellation of some freighter flights at the end of August, along with some large hi tech shipments for Apple and Hewlett-Packard. Combined with the Golden Week holiday and some restrictions on flights due to the Asian Games in Hangzhou, it said it expected some sort of increase.

However, it may not be significant. Niall van de Wouw, chief airfreight officer for Xeneta, said the year would likely fizzle out weakly.

“We are picking up signals that it could take another few quarters before we see more demand on a global level,” he said.

“August was very quiet, like July, and we see no meaningful signals from a qualitative or quantitative point of view of any kind of peak arising this year. There might be some early peak season charter requests floating around, but they are backed up by very little demand. The (low) rates and the limited timeframe the requestors are looking for signal that they are not too concerned at the moment about getting the required capacity when they actually need it.

“The market seems to have levelled out, but still holds a lot of uncertainty, and not just for airfreight. There was also no peak for the ocean market, which typically precedes the airfreight market by a couple of months. There are even blank sailings scheduled ahead of the Golden Week period.”

He added that there may be a bounce in the second half of October, when capacity comes out of the market, but that it would not be significant. He said: “The signals for the rest of the year are not good, given the macroeconomic outlook hasn’t improved.”

Spot rates have increased, however, on China-US, where passenger travel continues to be subdued, while the Russia-Ukraine war means north-east Asian routes continue to see higher airfreight rates.

And, as The Loadstar will reveal tomorrow, e-commerce could be one bright spot for the overall China market.

But, as Mr van de Wouw pointed out, the indicative container shipping market is currently in the doldrums, with no peak, pointing to a likely overall weak air cargo performance.

“The air cargo industry is coming to terms with the market conditions and not even the current and planned restrictions we see on containerships moving through the Panama Canal are likely to provide a noticeable uptick to airfreight volumes. Whichever way you choose to look at it, demand growth simply does not exist in this current moment or for the foreseeable future.

“Shippers will no doubt be tempted to fix more longer-term deals, because the levelling of volumes and the imminent drop-off of some capacity means the market may not get any better than it is right now for capacity buyers,” he said.

Listen to this clip from the latest Loadstar Podcast of TAC Index’s Neil Wilson talking airfreight rates for Q4.


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