Rates stay firm despite slight July demand lull; India to Europe tonnages fall
Worldwide air cargo rates and demand softened slightly from most regions in the second week of July, although tonnages and average global prices remain significantly higher than this time last year, thanks to continuing elevated demand and high rates from Asia and the Middle East.
According to the latest weekly figures and analysis from WorldACD Market Data, there was a -1% drop in worldwide tonnages in week 28 (8 to 14 July), mainly due to falls from Europe (-5%), Asia Pacific (-2%) and Africa (-5%). But a post-Independence Day rebound from North America (+6%) origins and from Central & South America (CSA) (+4%) helped keep total worldwide tonnages relatively firm during what is normally a quiet month.
On the pricing side, average worldwide rates edged down -1% to US$2.50 per kilo in week 28, with small (-1%) declines from Asia Pacific, Middle East & South Asia (MESA), Europe, and CSA origins. However, that figure of $2.50 per kilo is up +11%, year on year (YoY), based on a full-market average of spot rates and contract rates, and remains significantly higher than the equivalent period prior to Covid (+44% compared to July 2019). As in previous weeks, those higher rates are mainly driven by increases from Asia Pacific and MESA origins, where average prices are up by +23% and +51%, respectively, in week 28.
Combining the figures for weeks 27 and week 28 reveals a similar picture on the rates side, with average prices up +11% globally and by +24% and +51%, respectively, from Asia Pacific and MESA origins, although compared with the previous two weeks (a two-week on two-week or 2Wo2W comparison) rates rose by +2%, thanks to a +3% rise in week 27, week on week (WoW).
Spot rate analysis
After last week highlighting some extremely high spot rates from various Asia Pacific origins to Europe and to the US in week 27, fresh analysis based on the more than 450,000 weekly transactions covered by WorldACD’s data, reveals that average spot prices eased off slightly in week 28 from some east Asia origin markets to Europe, dropping -16% from Thailand and -11% from Taiwan, to $2.65 and $3.65 per kilo, respectively. And average spot rates from China to Europe slipped back slightly for the third consecutive week. But there were further increases from Hong Kong (+7%), South Korea (+5%) and Japan (+3%) origins to Europe, despite a -8% fall in tonnages from Hong Kong, WoW.
Meanwhile, spot rates from Asia Pacific origins to the US were fairly stable in week 28, including from China, but they remain well up compared with the equivalent week last year (+63% and +38%, YoY, respectively).
Elsewhere, the highly elevated tonnages and price levels from various MESA origins to Europe seem set to persist into the second half of 2024, as the attacks on container shipping in the Red Sea continue to cause vessel diversions from the region. There was a reduction in overall air cargo demand in week 28 from MESA to Europe of -7%, driven mainly by declines in tonnages from Dubai (-17%) and India (-7%), although all three remain up substantially compared with this time last year (+17%, +82% and +16%, respectively, YoY). And on the pricing side, the increases compared with last year are even more pronounced, with average MESA to Europe spot rates of $3.25 a kilo in week 28, standing more than double (+126%) their level last year and falling just slightly (-1%) compared with the previous week.
India to Europe spot rates of $3.49 a kilo in week 28 have fallen somewhat from their highs of more than $4 a kilo three months ago, but they are dramatically up (+158%) on last year’s levels. Meanwhile, Bangladesh to Europe spot prices held firm in week 28 at $4.25 a kilo, although they have dropped back from levels of more than $4.60 for several weeks in April and May, as per the analysis.