Air freight rates surge ahead of Chinese New Year

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by Emily Atkins

Air cargo rates from China have surged in the final full week ahead of Lunar New Year (LNY) on 10 February, according to the latest figures from WorldACD Market Data, as shippers rush to get goods shipped before the LNY holiday period.

Fresh analysis this week reveals that rates for air cargo shipments from China to North America rose by 14 percent, week on week (WoW), in week 5 (29 January to 4 February), although rates are still well below their level in early December. Similarly, China to Europe rates rose by eight percent, WoW, although rates on this lane are also still well below their fourth-quarter peak levels in early December.

It is unclear to what extent this pre-LNY demand is being boosted by the disruptions and delays to container shipping in the Red Sea, which have also reportedly led to some conversion of China-Europe sea freight to sea-air shipments, via the Gulf and to some extent via the US west coast. Air cargo prices from the Gulf to Europe remained broadly flat in week 5, WoW, and below their level in early December, WorldACD data indicate.On the tonnage side, data continue to indicate strong traffic demand levels from China to Europe, as well as to North America, and also ex-Gulf to Europe, whereas this time last year traffic was slowing down, although it is impossible to measure the extent of the Red Sea impact on this traffic due to the huge impact of LNY.

Indeed, the magnitude of the Red Sea impact on air freight will probably only become clear well after LNY, when it may be possible to identify whether we have structurally different flows, depending also on the development of that crisis and many other factors. Meanwhile, on a worldwide basis, the recent surge in traffic ex-China has helped cause overall global air cargo demand and rates to continue to rise in the days leading up to LNY, with worldwide tonnages so far this year significantly higher than the equivalent period last year, according to the latest figures from WorldACD.

Year-on-year (YoY) comparisons also reveal some big changes this year, although these are largely explained by the difference in the timing of LNY. Indeed, total worldwide tonnages for weeks 4 and 5 this year were up by 25 percent compared with last year, although those figures are massively skewed by a 70 percent rise ex-Asia Pacific. The other big YoY tonnage difference was a 20 percent rise ex-Middle East & South Asia, most likely in part reflecting some conversion of Asia Pacific to Europe traffic to sea-air.

On the pricing side, average worldwide rates of US$2.35 per kilo in week 5 are 16 percent below their elevated levels this time last year, although they remain significantly above pre-Covid levels (up 32 percent compared to February 2019). Overall worldwide air cargo capacity remains significantly up on last year’s levels (15 percent), boosted by a 33 percent rise ex-Asia Pacific and a 18 percent rise ex-Central & South America, although there are also double-digit percentage rises ex-Middle East & South Asia (+14 percent) and ex-Africa (+10 percent).