The air cargo market is seeing change as a combination of Valentine’s Day, Chinese New Year (CNY), and capacity shifts impacts the market.
Chinese forwarders will shut their doors on Friday, along with factories (although some have closed early), and won’t reopen until 26 February, creating a gap in air cargo schedules.
Rate surge on key lanes: Taiwan–US in focus
One of the sharpest lanes right now is Taiwan–US, where, according to Freightos Terminal, spot rates have almost doubled in the past two weeks, from $5.63 per kg on 12 January to $10.26 today.
Other lanes suggest a pre-CNY mini peak, with South-east Asia to both North America and Europe rising in the past fortnight, as well as Greater China to North America.
Indices signal firming market ahead of CNY
The overall Freightos Air Index (FAX) has gone up from $2.20 on 26 January to $2.57 now. The TAC Index also reported a 4.1% rise globally, week on week, to 2 February, “amid signs that rates are now firming up ahead of the so-called ‘mini peak’ which typically occurs in the run-up to Chinese New Year”. While rates on the busiest lanes out of China did not change significantly during the week, TAC said they remained comfortably ahead year on year to both Europe and the US.
Regional lane performance: Asia and transatlantic strength
It added that outbound Shanghai rose 5.3% week on week, leaving it up 8.9% year on year, while there were also “chunky gains” week on week from Taiwan, both to Europe and the US, and strong increases from Seoul and Bangkok to the US. Europe also strengthened, led by transatlantic lanes.
Capacity Rebound Raises Sustainability Questions
However, the improving demand picture appears to be facing a strong rebound in available capacity, raising questions over how far the rate recovery can extend beyond the seasonal window.
Freighter Capacity Expansion Ahead of Valentine’s Day
According to Rotate’s capacity database, freighter capacity jumped 12% in the week to 1 February, compared with the average of the previous four weeks, and 4% on the previous week. Much of this gain can be attributed to the forthcoming Valentine’s Day: week on week, freighter capacity from Africa to Europe went up 43%, while Latin America to North America was up 19%.
Perishables Demand and Disruption Impacts
WorldACD noted that demand from flower shipments has been building ahead of Valentine’s Day on 14 February, particularly from Central & South America (CSA) and Kenya. At the same time, there have been severe weather-related disruptions in traffic to and from North America, and further flight disruptions in parts of the Middle East due to heightened tensions between the US and Iran.
Airlines Move Quickly to Restore Capacity
But the transatlantic market has also seen steep capacity rises, as have other pockets, suggesting airlines are moving quickly to add space back into the market. WorldACD said at the weekend that the market “has stabilised”.
Rates Continue Gradual Recovery, but Slower Than Last Year
Average global rates edged up 2% in the week to $2.43 per kg, continuing a gradual recovery after bottoming out in January. However, WorldACD said the pace of recovery appeared slower than last year, most likely due to the capacity rebound.
Outlook: Firm Near Term, Challenging Beyond Seasonal Peaks
Taken together, TAC, Freightos, and capacity indicators suggest the air cargo market is firming into February, supported by pre-CNY front loading and Valentine’s perishables demand, while disruption-related constraints continue to influence pricing on certain lanes.
However, with freighter capacity rebounding sharply — up 20% year on year according to Rotate and now running ahead of demand — the market may struggle to sustain a broad-based rate surge beyond the seasonal peaks, especially once CNY factory shutdowns begin to reduce export volumes out of Asia and flower demand eases after mid-February.
Source: https://theloadstar.com/airfreight-rates-firm-but-capacity-rebound-caps-gains/
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