Global air freight rates increased marginally last week, according to the latest data from the TAC Index. The global Baltic Air Freight Index recorded a 0.4% rise in the week ending June 16. However, rates remain 5.9% lower year-on-year.
Despite initial optimism following the temporary suspension of high tariffs between the U.S. and China for 90 days, rate increases have been subdued. This is attributed to the recent elimination of the de minimis exemption for small parcels entering the U.S., coupled with persistent uncertainties about the market outlook.
Rate Trends on Major Routes
Rates on key routes out of China declined overall. Both the Europe-bound and U.S.-bound lanes experienced decreases. Pure spot rates tracked by the new BAI spot indices from Hong Kong, which are set to transition from private to public trials, exhibited a consistent downward trend throughout the week.
The comprehensive index for outbound Hong Kong routes, encompassing both spot and contract rates, dropped by 2.4% week-on-week (WoW), leaving it 11.6% lower year-on-year (YoY). Similarly, rates from Shanghai fell by 2.0% WoW, resulting in a 6.4% YoY decline.
Elsewhere in Asia, rates from Vietnam were slightly lower WoW. In contrast, rates from India to both Europe and the U.S. showed a modest increase WoW, although they remain significantly lower compared to the same period last year. Notably, lanes to Europe from Bangkok and Seoul continued to perform strongly, maintaining substantial YoY gains.
European and North American Market Insights
Out of Europe, air freight rates increased WoW to China but declined to Japan and fell slightly overall to the U.S. The index for outbound Frankfurt routes rose by 3.4% WoW, narrowing the YoY decline to just 3.4%.
London Heathrow experienced a substantial WoW surge, with rates climbing 24.3%. This growth was driven by significant increases on routes to Southeast Asia, the Middle East, and the U.S., pushing the index up by an impressive 26.7% YoY.
From North America, rates declined slightly WoW to both Europe and South America. However, southbound rates to South America remain well above YoY levels. Rates to China experienced a WoW increase, showcasing resilience amid market fluctuations.
Source: TAC data
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