- Global spot air freight rates rose in late October, driven mainly by strong demand from the Asia-Pacific region ahead of the holiday shipping peak.
- India’s Diwali slowdown led to a temporary decline in regional loads, but underlying market pressure on capacity remains.
- The corridors from Asia to the United States and Europe saw the largest price increases, with China, South Korea, Taiwan and Vietnam all recording their highest price levels in months.
Average worldwide spot rates rose in the last full week of October, despite a sharp decline in tonnage from India due to the Diwali festival holidays, as prices from Asia-Pacific origins rose ahead of Thanksgiving, Black Friday and Christmas.
According to the latest weekly figures from WorldACD Market Data, global spot prices in week 43 (October 20-26) jumped by an average of 4 percent, week over week, a similar pattern to that seen in week 43 last year – driven by 5 percent spot price increases from Asia-Pacific, European and North American assets. Spot prices from the Middle East and South Asia fell by 4 percent, year-on-year, as air cargo from that region fell by 16 percent, year-on-year. This is mainly due to the significant reduction in dutiable weight from India, where tonnage decreased by about 30 percent, to major markets such as Europe and the United States, due to the Diwali holidays.
These declines in air volumes from India contributed to a 2 percent decline in total global tonnage, in week 43. Analysis by WorldACD, based on more than 500,000 weekly transactions covered by WorldACD data, indicates that excluding the decline in traffic outside India associated with Diwali would show a 1 percent decline in global tonnage in week 43.
Although this is not evidence of a strong peak season in the fourth quarter, the significant rise in spot prices from three major origin areas suggests some increasing capacity pressures from key markets.
Pressure in the Asia-Pacific region
Looking specifically at origin markets in the Asia-Pacific region, where capacity pressures traditionally begin at this time of year, spot prices from the Asia-Pacific region to the United States rose another 8 percent, after a 6 percent rise in the previous week, as demand rebuilds after the Mid-Autumn Festival in China, the holidays in Taiwan and South Korea and before Thanksgiving in the United States. Spot prices from China to the US rose another 11% to US$5.40 per kilo – their highest level this year – after rising 18% in the previous week, and prices from South Korea to the US recorded a 21% year-on-year increase to US$5.73 per kilo, their highest level since July. Prices from Taiwan to the United States saw another 5 percent year-on-year increase after an 8 percent year-on-year increase in the previous week, and prices in the former Vietnam rose 6 percent.
From the Asia-Pacific to Europe markets, which were less volatile than the tariff-hit Asia-Pacific markets to the US markets this year, spot prices remained relatively stable, rising 2 percent on average, in week 43, to US$4.02 per kilo. Spot prices from China to Europe continued to rise slowly, with a 2% year-on-year rise to US$4.08 per kilo, the highest level since the beginning of June. Spot prices to their South Korean counterparts rebounded another 5%, the second straight weekly rise after national holidays in early October, and Vietnam to Europe prices rose 5% to US$3.69 per kilo, their highest level since February.
About the Author
