Freight rates have experienced a downward trend in recent weeks, driven by the implementation of U.S. tariffs on goods from China and the cessation of de minimis exemptions for low-value imports from the country.
According to the latest data from TAC Index, declines were observed across “all outbound indices for major airports around the world” during the week ending May 5.
Global Freight Rate Trends
The Baltic Air Freight Index, calculated by TAC, recorded a 4.5% decline week-on-week, while year-on-year figures show a drop of 5.7%.
TAC noted, “Overall rates out of China have not yet fallen as much as some feared, with rates to Europe slightly up again over the latest week – though down on lanes to the U.S.”
Outbound freight from Hong Kong saw its index decline by 3.3% week-on-week, representing a 7.4% year-on-year decrease. Similarly, spot rates from Hong Kong reportedly continued to weaken further this week.
Shanghai outbound rates dropped 2.4% compared to the previous week, marking an 8.6% year-on-year decline.
Regional Rate Fluctuations
Rates from India to the U.S. were also on a downward trajectory, accompanied by declines on lanes from Vietnam and Bangkok to Europe.
Outbound rates from Europe to the U.S. have decreased, partly influenced by the European Union’s response to U.S. tariffs. Rates to China from Europe also saw declines.
The index tracking outbound routes from Frankfurt fell by 5% week-on-week, with reductions across all major trade lanes. However, year-on-year figures showed a modest 1.6% increase.
Conversely, routes from London Heathrow faced a sharper 10.1% week-on-week decline, attributed to significant drops on lanes to Southeast Asia. Year-on-year, Heathrow rates were down by a steep 26.8%.
North American Trends
From the U.S., freight rates to Europe and South America experienced declines. However, rates to China saw a slight uptick. Notably, U.S.-to-China rates remain higher on a year-on-year basis, highlighting some resilience in that trade lane.
Market Outlook
These developments underscore the impact of regulatory changes and geopolitical tensions on global air cargo markets. While some regions and routes are showing resilience or even slight gains, the overall trend remains one of rate suppression. Market stakeholders will need to navigate these volatile conditions with strategic agility to mitigate risks and identify emerging opportunities.
𝐀𝐋𝐒 – 𝐓𝐡𝐞 𝐋𝐞𝐚𝐝𝐢𝐧𝐠 𝐨𝐟 𝐀𝐯𝐢𝐚𝐭𝐢𝐨𝐧 𝐋𝐨𝐠𝐢𝐬𝐭𝐢𝐜𝐬
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ALS