News #137 - WorldACD Weekly Air Cargo Trends (week 46)

Air cargo rates have continued to rise in the lead-up to Black Friday and Thanksgiving at the end of this month, driven by further increases in spot prices from Asia Pacific to the US and Europe, according to the latest figures from WorldACD Market Data, although there have also been increases in intra-Asia tonnages and rates

Average spot rates from Asia Pacific origins rose by +4%, week on week (WoW), to US$4.11 per kilo in the second full week of November (week 46: 10 to 16 November), with tonnages from that manufacturing powerhouse region continuing to increase (+1%, WoW) during this key retail period.

Spot rates from Asia Pacific to the US increased by a further +4%, WoW, to $5.51 per kilo, driven by a recovery from Japan in tonnages (+16%, WoW) and spot prices (+10%) following the one-day national holiday in Japan the previous week, plus rate increases from South Korea (+13%), and Vietnam (+8%). However, average spot rates from Asia Pacific to the US are down, YoY, since the end of April and stand at -11% in week 46, with some of the biggest decreases seen from Japan (-31%, YoY), Singapore (-19%), Indonesia (-19%), Vietnam (-17%), South Korea (-10%), and Hong Kong (-8%).

As highlighted last week, ex-Asia Pacific markets in the final months of 2024, for example to the US and Europe, 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.

Air cargo tonnages from Asia Pacific to the US remain significantly higher, year-on-year (YoY), despite the imposition, since April, of higher tariffs and de minimis restrictions on US imports of goods from China and other countries in the region. Although tonnages from China (-2%, YoY), Hong Kong (-16%, YoY), and South Korea (-10%, YoY), remained below last year’s levels in week 46, tonnages from the region as a whole were +6% higher, YoY.

Strong growth from Southeast Asia to US
That has been the case for most of the last six months, thanks to big YoY increases from Taiwan and Southeast Asia origins to the US. Indeed, according to new analysis by WorldACD, demand from Southeast Asia (SEA) origins to the US was up by +40%, YoY, in October, the highest YoY full-month growth figure this year. For the first ten months of this year, tonnages from Southeast Asia to the US were up by an average of nearly +26%, YoY.

In contrast, year-to-date (YtD) tonnages from China and Hong Kong (CN/HK) to the US were down by nearly -6%, YoY, whereas to Europe they were up by around +8% – partly reflecting a diversion of CN/HK air exports from the US to Europe and other markets. YtD tonnages from SEA to Europe are down by almost -6%, YoY.

These figures partly reflect a trend for US importers to seek suppliers from other countries as alternatives to China. For some countries, such as Taiwan, it also partly reflects very strong demand this year for high-performance semi-conductor chips, including those used in AI. Air imports from Taiwan have been consistently up by around 30-50% this year, with similar YoY increases from Vietnam, Thailand and Malaysia, where semi-conductors and other electronic goods and components also form a significant part of air exports. In week 46, for example, air freight tonnages to the US from Taiwan, Vietnam, Thailand, and Malaysia were up by +41%, +60%, +37%, and +62%, YoY, respectively.

Source: WorldACD Weekly Air Cargo

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