Global airfreight rates continue to ease

Global air freight rates continued to soften, with the Baltic Air Freight Index (BAI00) falling 2.7% week on week to 6 July. Rates remained 27.7% higher year on year, although lower jet fuel prices are beginning to reduce upward pressure on pricing. Rates from major Asian export markets showed mixed trends, with declines from China, Hong Kong and India offset by increases on some lanes from Korea, Thailand, Vietnam and Taiwan. Outbound Shanghai rates fell 6% week on week, while Hong Kong rates eased only 0.7% but remained 30% higher year on year. European and US markets also saw varied pricing movements, with most European outbound rates edging lower while some lanes remained elevated. US-origin rates were comparatively stronger, with Chicago outbound rates rising 10.1% week on week and remaining 49.6% higher year on year. Air freight rates continued to ease a little lower last week according to the latest data from TAC Index, the leading price reporting agency for air freight markets and calculating agent for the Baltic Air Freight indices. The global Baltic Air Freight Index (BAI00) eased lower for a second successive week, dropping -2.7% over the seven days to July 6, leaving it still a lot higher than a year ago following this year’s military conflict in the Gulf – though now by only +27.7% year-on-year, with the impact of lower jet fuel prices in June starting to feed through to average rates. Overall rates on the busiest lanes out of China were lower WoW both to Europe and to the US, as were BAI Spot rates out of Hong Kong and India – though also firmer again from Korea to the US. But the index of outbound routes from Hong Kong (BAI30) – reflecting the full spectrum of spot and contract rates being paid – was only a little lower by -0.7% WoW to leave it still at +30.0% YoY. Outbound Shanghai (BAI80) fell more – by -6.0% WoW to leave it at +27.7% YoY. But there was a more mixed picture on lanes from other major locations in Asia, with rates rising again WoW from Bangkok both to Europe and the US, and varying on lanes out of Vietnam. Likewise, rates were firmer again WoW out of Taiwan, while from Seoul rates were falling to Europe but rising steeply again to the US. Rates from India were little changed WoW. From Europe, overall rates were mostly a little lower WoW, including on the Transatlantic lanes to the US as well as to China, Japan, India, Brazil, Mexico and South Africa – though also firmer on some lanes out of Amsterdam, Frankfurt and London. Exceptions included lanes from Europe to Australia and to the UAE, which edged higher again WoW and remain a long way up YoY. The index of outbound routes from Frankfurt (BAI20) dipped -2.9% WoW to leave it at +25.1% YoY. Outbound London Heathrow (BAI40) fell by a steeper -11.5% WoW to leave it up only +1.8% YoY. Rates from the US continued to be a little firmer than from elsewhere, with only a slight fall overall WoW on lanes to Europe, no change on lanes to China and a modest fall to South America – but also up on some lanes, including to Brazil and to Korea. The index of outbound routes from Chicago (BAI50) gained a further +10.1% WoW, boosted by gains both to Europe and to South East Asia, leaving it at an impressive-looking +49.6% YoY. Rates from Mexico to Europe were also higher again WoW and remain up a lot YoY.