News #132 - WorldACD Weekly Air Cargo Trends (week 41)

Holiday season in Asia holds back worldwide tonnages

Worldwide air cargo tonnages dropped -3% in week 41 (6 to 12 October) compared to the previous week, due mainly to China’s ‘Golden Week’ mid-autumn festival holiday and national holidays in Taiwan and South Korea, after Hong Kong and southeast China originating tonnages had bounced back from the effects of ‘super-typhoon Ragasa’ the previous week.

According to the latest weekly figures from WorldACD Market Data, tonnages from Asia Pacific origins as a whole were down -9%, week on week (WoW), in week 41, with volumes from China and Hong Kong dropping -13% and -6%, respectively, due to this year’s extended ‘Golden Week’ holiday period, from 1 to 8 October. Taiwan recorded a -10% drop in tonnage linked to ‘National Day’ (9-10 October) there, while chargeable weight from South Korea plummeted by -46%, WoW, due to the combination of that country’s Chuseok (5-8 October) and Hangeul (9 October) national holidays.

Without these negative developments, worldwide tonnage development would have been slightly positive (+1%) in week 41, WoW, based on the more than 500,000 weekly transactions covered by WorldACD’s data.

Overall worldwide tonnages for weeks 40 and 41, combined, have been better than last year (+4%), despite a one-day-longer Chinese holiday this year. Asia Pacific to US (-11%, WoW) tonnages were slightly harder hit than Asia Pacific to Europe demand (-9%, WoW). Chargeable weight from China to the US also dropped by -11%, WoW, in week 41, taking it -6% lower than last year.

Further fall in China to US spot rates
On the pricing side, one noticeable change was that air cargo spot rates from China to the US fell for the second consecutive week by -7%, WoW, to US$4.07 per kilo – taking them -20% below their equivalent level in week 41 last year, when spot prices had already started bouncing back from their subdued level the previous week during Golden Week. But tonnages and spot rates from Hong Kong to the US were more stable, with spot rates down just -1%, WoW and +2% higher, year on year (YoY) – despite tonnages being -19% lower than their equivalent level this time last year, due to reduced e-commerce volumes since the removal of ‘de minimis’ exemptions on low-value US imports.

The threat of new higher US import tariffs on goods from China from next month may lead to a spike in shipments and pricing as importers attempt to front-load cargo ahead of those tariff increases. But there was no sign yet in week 41 (Oct 6-12) of any spike in either demand or rates for shipments from China and Hong Kong to the USA, with the threat only emerging on 10 October – in response to restrictions by China on its ‘rare-earth’ exports.  

But higher US tariffs on goods from India to the US seem to be having an impact on India exports, as tonnages ex-India to the US dropped for the second week in a row, falling -4%, WoW, in week 41, while volumes ex-India to Europe increased +6%.

Source: WorldACD

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