Asia Pacific rates soar despite drop in China-USA demand
Air cargo spot rates from Asia Pacific continue to soar, despite a drop in demand from China to the USA in the last two full weeks, according to the latest weekly figures and analysis from WorldACD Market Data.
Average global air cargo rates rose by a further +2% in the third full week of July to US$2.56 a kilo, thanks to increases from Asia Pacific and Middle East & South Asia (MESA) origins, despite total worldwide tonnages declining for the third consecutive week. That average worldwide of $2.56 a kilo is +14% above the equivalent week last year and remains significantly higher than the equivalent period prior to Covid (+47% compared to July 2019).
Based on a full-market average of spot rates and contract rates, average prices from Asia Pacific origins rose by a further +2% in week 29 (15 to 21 July) to US$3.34 per kilo, up by +25% compared with the equivalent week last year. Meanwhile, average rates from MESA origins went up by +1% to $2.78 per kilo and stand +56% higher than this time last year, as disruptions continue to container shipping in that region. Africa origins also saw a +2% increase, to $1.93 per kilo, around +6% up on last year, based on the more than 450,000 weekly transactions covered by WorldACD’s data.
These pricing increases come despite falling demand from all of the main regions in week 29, including a -7% week-on-week (WoW) decrease from MESA and from Africa, and a -4% drop from Central & South America and from Europe compared with the previous week. Asia Pacific (-2%) and North America (-2%) were more stable, with tonnages from Asia Pacific around +13% higher, year on year (YoY), while from MESA they are up by +10%, YoY.
Worldwide chargeable weight in week 29 was up +7%, YoY, although that compares with a rise of around +10% or more, YoY, throughout most of this year. Expanding the comparison period to two weeks, worldwide tonnages in weeks 28 and 29, combined, were up, YoY, by +9%, with rates up +12%, driven by a +54% rise from MESA and a +24% rise from Asia Pacific, YoY.
Asia Pacific to USA rates soar
After dropping by -2% and -3% in the previous two weeks, chargeable weight from Asia Pacific to the USA bounced back with a +2% increase compared with the previous week, accompanied by a +5% rise in spot rates, taking average spot prices from Asia Pacific to the USA above $6 per kilo in week 29 ($6.01). That’s their highest level for several months, and up +67% compared with this time last year.
China to USA demand declines
Chargeable weight from Asia Pacific to the USA was also up in week 29, by +8%, YoY, although tonnages from China to the USA were down by -8%, YoY. That decline is particularly noticeable on the China to Los Angeles (LAX) market, where tonnages were down -23%, YoY, limiting total YoY tonnage growth from Asia Pacific to LAX to just +4%. China to LAX tonnages began declining around three months ago, around the time when US authorities tightened certain customs inspections policies for inbound shipments from China, especially at LAX.
Nevertheless, average China to USA and China to LAX spot rates of $5.25 and $5.02 in week 29 remained significantly higher than their level the same week last year, increases of +40% and +44%, YoY, respectively.
Meanwhile, demand from MESA origins to Europe – which has been at elevated levels so much of this year – has dropped back somewhat in the last few weeks. Although tonnages in the last two full weeks are still around +15% higher than in the equivalent period last year, that’s well below the levels of +30% to +50% recorded in February, March and April. Demand from Bangladesh has been somewhat volatile, and dropped substantially in the last two weeks – most likely linked to disrupted internet services in the country last week – although tonnages from other important MESA origin markets remain up substantially, YoY, including from Dubai (+110%), Colombo (+66%), and India (+18%).
And prices from many MESA origins remain very high, with average spot rates from MESA to Europe in week 29 of $3.30 a kilo. That’s more than double (+126%) their level in week 29 last year, including rates from Bangladesh of $4.59 a kilo (+178%, YoY), from India of $3.54 a kilo (+161%, YoY), and from Sri Lanka of $3.20 a kilo (+78%, YoY).
Source: https://www.worldacd.com/trend-reports/weekly/worldacd-weekly-air-cargo-trends-week-29/
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