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Air cargo rates stay firm driven by Asia and Middle East

Latest views on air cargo market developments, covering each of the last five weeks up to Sunday June 16, 2024 © WorldACD
Latest views on air cargo market developments, covering each of the last five weeks up to Sunday June 16, 2024 © WorldACD

rates are holding firm during what is traditionally a quieter period for the market, boosted by continuing strong demand and high spot rates from Asian and Middle Eastern origins, according to the latest weekly figures and analysis from WorldACD Market Data. Although total worldwide tonnages in the last full week (week 24, 10-16 June) slipped by 2%, average rates remained more or less stable at US$2.51 per kilo, up 8% compared with the equivalent week last year and significantly above pre-COVID levels (42% higher than June 2019), based on the more than 450,000 weekly transactions covered by 's data. Combining the figures for the last two full weeks (weeks 23 and 24) reveals a 1% rise in both rates and tonnages compared with the previous two weeks (a ‘two-week on two-week' or ‘2Wo2W' comparison). Comparisons with last year show that both tonnages (up 11%) and rates (up 8%) are well above last year's levels, thanks to significantly higher demand from all the main worldwide origin regions, led by higher rates (up 52%) and tonnages (up 13%) from the Middle East & South Asia () origins, and higher rates (up 17%) and tonnages (up 16%) from Asia Pacific origins (based on a total-market average of spot rates as well as contract rates).

Analysis of certain individual lanes reveals some interesting changes in the last few weeks in the large Asia Pacific-USA and -U.S.A. markets. For example, there have been significant increases in average spot prices in the last five weeks to the USA from Asia Pacific as a whole (from US$4.80 in week 19 to US$5.34 in week 24, up 11%) and China (from US$4.91 in week 19 to US$5.25 in week 24, up 7%), taking those prices to 52% and 38% above their levels this time last year.

Looking specifically at LAX airport, where there have been anecdotal reports of cancellations of some freighters due to enhanced customs checks of inbound e-commerce-driven air flights from China, rates have seen similar increases in the last five weeks, from Asia Pacific as a whole (from US$4.27 in week 19 to US$4.79 in week 24, up 12%) and China (from US$4.52 in week 19 to US$4.87 in week 24, up 8%), taking those prices to 38% and 30% above their levels this time last year, respectively.

On the demand side, the picture is somewhat different. Whereas Asia Pacific to LAX tonnages is significantly up, year on year (up 18% in week 24), China to LAX tonnages have been down, year on year, for most of the last seven weeks. For China to U.S.A. as a whole, tonnages are up, year on year, in each of the last five weeks, although they have also flattened off during that time, standing in week 24 at just 2% above their levels last year.

It seems that there has been some decline in China tonnages to LAX in the last month or so, compared to the China-U.S.A. market as a whole and compared to the wider Asia Pacific to USA and LAX markets, supporting the anecdotal observations about cancelled freighters from China to LAX. This is beginning to drive down overall China-U.S.A. tonnages, although China-U.S.A. and Asia Pacific-U.S.A. spot rates have continued to rise.

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