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Airfreight rates on major routes out of Hong Kong remained above last year’s levels in February despite concerns regarding the impact of tariffs.
The latest figures from the Baltic Exchange Airfreight Index, based on TAC data, show that average rates, based on both spot and contract, from Hong Kong to North America increased 15.2% year on year to $5.37 per kg.
Prices were down on the $5.60 per kg recorded in January, but a month-on-month decline at this time of year isn’t unusual depending on the timing of the Asian Lunar New Year (LNY) holiday when factories in many Asian countries close.
This year, much of the pre-LNY rush would have taken place in January, whereas in 2024 more of it would have taken place in February because of the later timing of the holiday.
Contacts say that spot rates out of Hong Kong to North America dipped in the middle of February before picking up as the month headed to its conclusion, suggesting that the market was bouncing back following the LNY dip.
The rate firmness comes despite the US introducing 10% tariffs on goods from China and stopping the de minimis exemption on goods from the country for a few days.
Analysts say that at present it is hard to disentangle the impact of the tariffs from the effects of the LNY and how these two developments will affect the market.
"The relatively firm tone to the market confounds some expectations that fears over rising tariffs and the threatened end to the ‘de minimis’ exemption for smaller parcels entering the US might hit volumes and rates hard, amid reports of some e-commerce flights already getting cancelled,” TAC said in a mid-month market analysis.
“Rates reported so far in the period post-Chinese New Year do not reflect anything so dramatic, at least not yet.”
Figures from WorldACD show that demand out of Asia Pacific has "continued to rebound towards their pre-Lunar New Year levels" in recent weeks.
"Chargeable weight flown from Asia Pacific origins regained a further 6% in week eight (17 to 23 February), taking them close to their levels in mid-January," WorldACD said.
Demand from Asia Pacific to both the US and Europe was up 5%, the analyst said. Demand out of Hong Kong and Japan to the US was up by double-digit percentage levels (11%) while it was up by the lower amount of 2% from China.
To Europe, demand from China was up 5% but from Hong Kong was flat.
Meanwhile, from Hong Kong to Europe, TAC figures show that average prices are 4.5% above last year’s levels at $4.37 per kg. Rates on this trade are also down on January levels when the average stood at $4.68 per kg, reflecting the LNY holiday.
Last year, rates on the trade were also boosted by the emergence of the Red Sea crisis that saw container vessels diverting around the Cape of Good Hope. While vessels are still taking the longer route around Africa, the situation has settled compared with this time last year.
Transatlantic drift
Rates from Europe to North America also continue to surge ahead of last year’s levels. The latest TAC figures show that rates from Frankfurt to North America are up by 26.2% compared with last year to $2.60 per kg.
Rates tend to rise over the winter on this trade lane as passenger airlines remove tonnage from the market in reflection of the quieter period for travel.
