Airfreight rates on major trades out of Hong Kong picked up in November for the peak season, although the rate of change lags behind historical levels.
Figures from the Baltic Exchange Airfreight Index, based on TAC data, show that average rates – a combination of both spot and contract – from Hong Kong to North America in November increased by 8.2% compared with October to $6.20 per kg.
From Hong Kong to Europe there was an 8.4% increase between the two months to $5.29 per kg.
However, the 8% increase reported on both trades lags behind the historical average between the two months of around 13%.
This reflects a weaker-than-expected peak season, where many had been expecting capacity shortages due to huge e-commerce demand growth to result in large rate increases on services to Europe and North America.
Also, the average would have been affected by more companies utilising block space agreements for the peak, meaning more of the market than usual is covered by contract deals rather than the spot market where pricing tends to be more reactive.
Speaking on a recent Air Cargo News webinar, in partnership with Maersk, Marcus Ng, regional head of airfreight, Asia Pacific, Maersk, explained that shippers had brought forward shipments to avoid potential disruption, particularly because of concerns over drawn-out port strikes at US east and Gulf coast ports.
He added that shippers had also prepared well to get fixed capacity in place to avoid any surprise surge and mitigate risk.
Tim van Leeuwen, head of consulting at Rotate, agreed that companies had been better prepared and had been planning further out than they had in the past in order to avoid the disruption experienced in recent years.
And Carrie Yap, area head of airfreight, Southeast Asia, Maersk, added that the improvement in ocean shipping reliability as box carriers had adjusted to the longer transit times created by the Red Sea crisis had resulted in some modal shift back to container shipping. Meanwhile, rates on the transatlantic have been picking up in recent weeks as airlines have reduced passenger operations in line with the quieter winter season.
Writing in a weekly market update, TAC Index said that in the final full week of November, overall rates from China were slightly lower week on week both to Europe and to the US.
“This perhaps reflected a lot of business going through at lower rates on previously agreed block space agreements (BSAs), with sources reporting that spot rates were on the rise – and the upper quintile in the range of prices paid was indeed still increasing,” TAC said.
Meanwhile, rates on the transatlantic have been picking up in recent weeks as airlines have reduced passenger operations in line with the quieter winter season.
The latest TAC Index between Frankfurt and North America increased to $2.09 per kg from $1.78 per kg a month earlier.
Source: https://www.aircargonews.net/data/weaker-than-expected-peak-sees-lower-increase-in-hong-kong-airfreight-rates/
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