Worldwide air cargo demand dropped by around -3% in the first week of July, due mainly to a fall in volumes from North America linked to US Independence Day holidays, but average worldwide rates rose by around +2%, week on week (WoW), thanks to rises from all the main global origin regions apart from North America. There were few signs of a final surge in exports to the US ahead of what was expected to be a key US tariff deadline date of 9 July – subsequently delayed until 1 August – although that traffic may also have been affected by the ‘Fourth of July’ celebrations in the US.
According to the latest weekly figures and analysis from WorldACD Market Data, the -3% WoW drop in worldwide tonnages in week 27 (30 June to 6 July) included a fall of -11% from North America origins, with declines also from Asia Pacific (-3%), Europe (-2%) and Central & South America (CSA, -2%). The +2% WoW rise in average worldwide rates to US$2.48 per kilo took prices +1% higher, year on year (YoY), based on a full-market mix of spot and contract rates, and was led by a +3% increase from Asia Pacific origins, based on the more than 500,000 weekly transactions covered by WorldACD’s data. Worldwide spot rates rose by +4%, WoW, to $2.65 per kilo – very similar to their level this time last year, although it’s worth noting that the US dollar is around -7% weaker now than it was a year ago against the other major world currencies that form the US Dollar Index (DXY).
In comparison, tonnages flown from China and Hong Kong to Europe have continued to rise, in June reaching their highest levels this year and taking them +15% higher than their level in June 2024. And average spot rates from China and Hong Kong to Europe were stable at $3.97 per kilo, similar to their level the previous month and their average level so far this year, but down -3% YoY.
In US dollar terms, week 27 was the first week since week 17 in which the average global rate was higher than the equivalent week last year, with Africa (+11%, YoY) and Europe (+7%, YoY) recording the biggest YoY increases. Rates outbound from Asia Pacific and North America are also flat, YoY. Average rates from the Middle East & South Asia (MESA) in week 27 were -9% below their inflated levels this time last year, but this may change soon in view of the most-recent Houthi attacks on vessels in the Red Sea.
Asia Pacific to US volatility continues
After three weeks of WoW increases, chargeable weight from China and Hong Kong to the US declined (-2%), WoW, taking it -4% lower on a YoY basis. But spot rates for that market are up +4%, WoW, although they are still significantly down (-17%) on their level this time last year. Similarly, after three weeks of mild recovery, tonnages from Asia Pacific as a whole to the US dropped back into decline (-3%, WoW) in week 27, with strong decreases from Indonesia (-18%), Japan (-9%), Malaysia (-9%), and Vietnam (-7%). But spot rates for Asia Pacific to the US were up +3%, WoW, including especially strong WoW increases ex-Singapore (+10%) and ex-Hong Kong (+7%). In comparison, tonnages from Asia Pacific to Europe in week 27 were up, WoW (+2%), most notably ex-Malaysia to Europe (+13%) and ex-Vietnam (+12%). Spot rates on the Asia Pacific to Europe market overall also rose, WoW, most notably ex-Taiwan to Europe (+9%).
These patterns reflect a number of factors, including the diversion of capacity and air cargo volumes from China-US markets to China-Europe and other markets, particularly for e-commerce markets most affected by changes to ‘de minimis’ rules. It also includes front-load shipments to beat the various tariff deadlines.
Transatlantic shifts
This week there was talk about a spike in spot rates from Europe to Canada in recent days. Analysis by WorldACD indicates that there was a spike in flown tonnages from Europe to Canada in week 27, with volumes surging by around +10% compared with their average level in the previous three weeks, although there was no evidence at the time of writing of rates significantly rising. However, spot rates from Europe to Mexico did rise significantly in week 27, increasing by more than +30%, compared with the previous week, to an average of more than $4.20 per kilo.
The Trump administration’s decision to further delay the implementation of higher ‘reciprocal’ tariffs to 1 August, and the announcement of new tariff rates for key trading partners such as Japan and South Korea, promises to bring fresh turmoil to international markets and may lead to further attempts to ‘front-load’ inventory using air freight in the next few weeks. In the medium term, the shift of freighter capacity from the Pacific to other markets seems set to persist, as exporters seek alternative and more-stable markets for their goods. And in the longer term, a decision by the US to entirely eliminate ‘de minimis’ exemptions for goods from all countries seems likely to have significant consequences for air cargo and its rate of future growth – at least to US markets.
Source: WorldACD
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