Airfreight rates continued to rise in May while demand also continued to beat last year's levels.
The Baltic Exchange Airfreight Index (BAI) shows that in May rates from Hong Kong to North America increased 9.1% year on year to $5.53 per kg.
From Hong Kong to Europe rates paid by forwarders are up 17% on a year ago at $4.41 per kg.
For both trades, it is the second month in a row of year-on-year increases following around 20 months of declines.
The higher prices reflect the worsening market conditions in 2023 but also a surge in e-commerce volumes out of Asia and the Red Sea shipping crisis that has resulted in some modal shift to air and the rise of sea-air solutions out of the Middle East and South Asia.
Rates are also up on last year at global level, according to WorldACD. Its figures show that overall prices exceeded 2023 levels for the first time in May and by week 21 were up 4% compared with a year ago.
However, the situation is not the same all over the world. The transatlantic has seen prices decline on a year ago as belly capacity has recovered following the pandemic and consumer demand for the types of goods transported between Europe and the US has been sluggish.
Figures from BAI show rates from Frankfurt to North America were down 25.8% on a year ago to $1.98 per kg, which even lags behind pre-Covid 2019 when forwarders were paying $2.21 per kg.
"More detailed analysis shows that this increase in the worldwide average rate is partly explained by the growing volumes on the long haul markets from Asia Pacific, where rates are relatively high," said WorldACD.
"If we adjust for volume effects, the average worldwide rate in week 20 and 21 is still -2% below the level of last year."
Meanwhile, tonnages continue to beat last year's levels and are up 9% year on year for weeks 20 and 21.
"That figure is inflated by strong demand from Asia Pacific (16%) and Middle East & South Asia (14%) origins," WorldACD said.
However, WorldACD said the volume boost out of the Middle East and South Asia due to the Red Sea crisis has eased somewhat over recent weeks.
"Tonnages from MESA to Europe in the last two weeks (weeks 20 and 21) are up, year on year by +26%, with Dubai at the top of the list in terms of origin growth points (97%) – although tonnages on Dubai-Europe routes are no longer at the extreme levels (228%) seen in the first half of March."
