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Global air freight rates rose last week, with the Baltic Air Freight Index (BAI00) rising 2% week-on-week and narrowing the year-on-year decline to negative 3.7%.
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The UPS MD-11 crash in Louisville grounded all MD-11 cargo aircraft at UPS, FedEx and Western Global, creating immediate uncertainty in global air cargo capacity, especially on trans-Pacific routes.
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Travel rates to China showed mixed performance, declining to the United States but rising to Europe, while the North Asia region saw increases to Australia, India and Mexico.
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Air freight rates in Hong Kong rose sharply, with the BAI30 plus three-point-seven percent rising year-on-year, and are almost back to positive levels year-on-year.
Air freight rates rose again last week according to the latest data from TAC Index, the leading price reporting agency in air freight markets. Baltic International air freight (BAI00) calculated by TAC rose another 2% in the week ending November 10, leaving it just 3.7% lower than the previous 12 months. Sources viewed this as unexceptional for a period when the market is entering peak peak season, although that was before the fatal accident of a UPS cargo plane in Louisville, grounding all MD-11 cargo planes operated by FedEx and Western Global as well as UPS. Sources indicate that this could have a significant impact on capacity in the coming days, particularly on Pacific routes, where the majority of MD-11 freighters operate, and could impact prices in the coming days.
Overall rates outside of China were actually lower for the US last week, although higher to Europe, as well as outside North Asia generally to most destinations including Australia, India and Mexico. However, BAI’s spot rates actually rose further in the past week from Hong Kong on Transpac as well as on the Asia-Europe corridors. The full index for outbound routes from Hong Kong (BAI30) rose plus three-point-seven percent week-on-week to leave it slightly lower at minus two-point-per-cent year-on-year. Outbound flights from Shanghai (BAI80) fell slightly by zero point two percent on a weekly basis to reach minus 2.5 percent on a yearly basis. Elsewhere in Asia, interest rates rose again in Taiwan and Vietnam, although they were more mixed in Seoul and Bangkok, and were firmer in corridors to Europe than in the United States, at least before the MD-11 crash. By contrast, outside India, interest rates were higher week-on-week in the US, but slightly lower in Europe, although still much lower year-on-year.
From Europe, prices rose again weekly on transatlantic routes to the United States, where a large number of MD-11 freighters also operate, as well as to Australia, India, Mexico and South Africa, although they also fell again on corridors to China, Japan and Brazil. The Frankfurt External Roads Index (BAI20) fell again after recent gains, falling by minus six-point-eight percent week-on-week to leave it at minus-three-point-four percent year-on-year. By contrast, London Heathrow Airport (BAI40) rebounded sharply from the previous week’s significant decline, jumping more than fifteen percent week-on-week to put it back into positive territory at zero point one percent year-on-year.
Outside the US, price patterns continued to be more mixed with gains on routes to Europe and South America, but fell again to China and South Korea. The Chicago External Road Index (BAI50) rose plus two-point-four percent weekly, but was down at minus twenty-six-point-eight percent year-over-year, leaving it still near its lowest point in recent years. From Central America, rates from Mexico to Europe rose again weekly, although still slightly lower year-on-year.
Go to TACIndex.com for the latest data, including more than 20 tracks that have been added to the weekly data set in recent months.
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