Copyright: AUUSanAKUL/ Shutterstock
Air cargo rates on key east-west routes declined in January but remained above last year’s levels as an early Lunar New Year and pre-tariff shipments helped guard against a drop off in e-commerce volumes.
Figures from the Baltic Exchange Airfreight Index, based on TAC data, show that average rates – a combination of both spot and contract – from Hong Kong to North America fell 16.8% in January to $5.60 per kg compared with a month earlier.
The drop off between the two months isn’t unexpected due to the quieter post-Christmas period and rates remain 7.3% ahead of last year’s levels.
Over the last nine years, rates between the two months have dropped by an average of 14.5%, although this figure is greatly affected by the timing of the new year.
There was a similar trend on services from Hong Kong to Europe where average prices fell 14.7% month on month to $4.68 per kg, but were 13.6% ahead of last year’s levels.
The average drop-off between the two months over the last nine years is 15.5%.
Freight forwarder Dimerco said that an early Lunar New Year holiday and companies looking to move goods early to avoid a potential tariff war between the US and China had supported demand.
Meanwhile, e-commerce demand had slowed in January and the pre-tariff ramp-up of inventories affected the market later on in the month.
Dimerco Express Group vice president for global sales and marketing Kathy Liu said: "With the change in power in the US administration, many customers rushed shipments from China to the US, causing a surge in activity from late December through early January — usually a slower period.
"As a result, we might not see the usual peak season before Chinese New Year, especially for transpacific eastbound routes. Intra-Asia markets are still busy, particularly with raw material transfers, and key destinations like Taiwan, Singapore, Vietnam, Indonesia, India, and Thailand are seeing strong demand.
"E-commerce activity has slowed after the 2024 promotions, and we don't expect much of a boost before Chinese New Year."
While e-commerce demand has slowed in the weeks after the Christmas holiday, data provider WorldACD said the strength of slowdown had not been as bad as many had feared.
The data provider said that it had analysed the demand drop between the peak season high in December and the early January low after “some air cargo industry executives have expressed concern this month about how steeply tonnages (mostly e-commerce) from Asia Pacific have dropped off since their peak in mid-December, especially to Europe”.
While this year’s lull is slightly stronger than a year ago, the difference is "not so significantly greater than last winter”.
In 2023 the decline between the peak and the first week of January in 2024 stood at 30% while this year the drop between the two periods was only slightly higher at 33%.
