Airfreight rates out of China continued to climb last week, while prices from Hong Kong were also on the up as shippers looked to tranship through the world's largest air cargo hub.
The latest figures from TAC Index show that last week average air cargo rates from Shanghai to North America increased by 9.1% compared with a week earlier to a record for the index (starting March 2016) of $9.34 per kg. At the start of March, rates on the route stood at $3.01 per kg.
From Shanghai to Europe there was a 1.6% week-on-week increase — slower than recent weeks — to an index record of $8.93 per kg. At the start of March prices stood at $2.32 per kg.
While the rate of price increases appears to be slowing out of Shanghai, the opposite is true from Hong Kong. Average rates from Hong Kong to North America increased by 26.8% week on week to $6.67 per kg a new record for the route (for the first time this year).
To Europe there was a 13.9% increase to $5.31 per kg, also a record.
Airfreight derivatives broker Freight Investor Services (FIS) suggested that companies may be looking to tranship through Hong Kong to avoid the cost of Shanghai.
"It wouldn't be too much of a stretch to suggest shippers moving non-medical goods might be using the spread between Hong Kong and Shanghai as a geographic arbitrage opportunity," FIS said.
"Shanghai's price rises remain meteoric however it remains quite clear that most of this is still atop the PPE price balloon. North America now sits relatively apart from the rest of the world in terms of virus cases, deaths and subsequently its relief effort."
The broker also pointed out that automotive factories are beginning to re-open in Germany, which could add to market dynamics as they grapple with the higher rates while sourcing parts.
