Air cargo spot rates from Asia Pacific origins continued to increase in the first full week of November, slightly raising average rates and spot rates globally, despite a week-on-week (WoW) fall in global tonnages.
According to the latest figures from WorldACD Market Data, spot rates from Asia Pacific origins edged up by a further +2%, WoW, in week 45 (3 to 9 November) to US$3.99 per kilo, nudging spot rates globally upwards by +1% to $2.78 per kilo, although the biggest WoW rise in spot rates was from Central & South America (CSA) origins, up +8% to $1.87.
Total worldwide tonnages, meanwhile, slipped by -3%, WoW, as chargeable weight dropped by -3%, WoW, from Asia Pacific, North America, and CSA origins, and by -2% from Middle East & South Asia (MESA) and Africa, with Europe tonnages dipping by -1%, WoW.
The drop in tonnages from Asia Pacific was partly caused by one-day national holidays in Japan and (to a lesser extent) Malaysia, with tonnages from Japan to worldwide markets down by -11%, WoW, negatively impacting Asia Pacific’s overall air cargo tonnages by -1 percentage point. Other factors potentially impacting air cargo capacity include Typhoon Kalmaegi, although the impact of that in week 45 was mainly limited to the Philippines.
In the US, flight cancellations linked to the shutdown of many US Federal government functions were mainly limited to domestic flights. And the FAA-forced grounding of MD-11 freighters was ordered on 8 November, close to the end of week 45, although some operators had voluntarily already decided to pause MD-11F flights earlier in the week following the tragic crash of a UPS MD-11F on 4 November at Louisville, Kentucky.
Overall worldwide capacity was stable in week 45, WoW. And a two-weeks-on-two-weeks (2Wo2W) comparison indicates there was a -1% reduction in capacity from weeks 42 and 43, combined, compared with weeks 44 and 45. During that period, a drop in passenger belly capacity following the end of the aviation summer season on 25 October was more or less compensated by increases in freighter capacity.
Similar patterns to last year
Some of this year’s patterns in week 45 were similar to last year, especially averaged out across weeks 45 and 44, with tonnages relatively stable but on a slight downwards trajectory, and rates continuing to rise, ahead of key peak-season events like Black Friday, Thanksgiving, and Christmas. But in absolute terms, average worldwide tonnages in those two weeks this year were +6% higher, year on year (YoY), while average rates were down by -4%, YoY.
It’s also worth noting that average air cargo rates during this period last year were strongly elevated compared with their level the previous year, with full-market rates having risen by +12%, YoY, in week 45 last year and spot rates standing +23% higher than in the equivalent week in 2023. Markets in the final months of 2024 experienced exceptionally strong demand and a big squeeze on capacity, particularly from China, due to surging volumes of Chinese e-commerce exports. This year’s rates, therefore, face tough comparison figures with last year, and remain relatively high by historical standards.
Looking specifically at the Asia Pacific market, the rate patterns this year in weeks 42-45 were relatively similar to those last year. For example, average spot prices from Asia Pacific origins between weeks 42-45 this year increased by +$0.26 per kilo, compared with +$0.29 in weeks 42-45 last year. But in absolute terms, they stand at $3.99 per kilo in week 45 this year, -7% lower than last year ($4.30).
Fall in Asia Pacific to US volumes
Examining the performance in week 45 this year of the Asia Pacific to US market, specifically, reveals that volumes were down by -6%, WoW, including lower tonnages from almost all origin markets, except Singapore and Indonesia, with significant WoW declines from China (-7%), Hong Kong (-6%), and South Korea (-7%). YoY, overall volumes were up slightly compared with week 45 last year (+2%), but with Southeast Asia significantly higher (+30-50%), and Northeast Asia down, YoY, including mainland China down -9%, Hong Kong down -14%, and South Korea trailing by -18%, YoY.
Asia Pacific to US spot rates were flat, WoW, with limited variation between markets, except for origin Japan (-21%) – presumably negatively impacted by the country’s national holiday. But YoY, average Asia Pacific to US spot rates in week 45 of $5.39 per kilo were -15% lower – including double-digit percentage drops from all of Asia Pacific’s top 10 origin markets to the US, with the exception of China, from where spot rates were down -9%, YoY, at $5.57 per kilo.
Asia Pacific to Europe comparison
In comparison, Asia Pacific to Europe volumes were down by -2%, WoW, in week 45, partially due to the national holidays in Japan and Malaysia. Volumes ex-China and Hong Kong were flat, WoW. Compared with last year, Asia Pacific to Europe volumes were significantly up (+9%), although that YoY percentage increase was slightly lower than the double-digit YoY percentage increases of the previous three weeks.
On the pricing side, average spot rates from Asia Pacific to Europe in week 45 were slightly up (+2%), WoW, to $4.20 per kilo, with rates ex-China up +5%, WoW, to $4.56 per kilo. But compared with last year, those average spot rates in week 45 were -10% lower ex-Asia Pacific to Europe, although rates ex-China to Europe were actually +6% higher, YoY.
Source: The World ACD
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