Global air freight rates firm, peak season bounce expected: TAC Index

15 Oct '23

2 min read

Pic: TAC Index

Insights

Global air freight rates may have finally bottomed out after a fall from the pandemic-era peaks, and are now rising into not just a genuine peak season bounce, but perhaps beyond that, TAC Index Limited noted.
The overall trend was fairly broad-based across major global lanes.
Outbound rates from Shanghai, London, Frankfurt, Chicago and Vietnam rose.

Global air freight rates may have finally bottomed out after a fall from the peaks of the pandemic era, and are now rising into not just a genuine peak season bounce, but perhaps beyond that, according to Hong Kong-based TAC Index Limited.

The overall Baltic Air Freight Index gained 11 per cent during September over the four weeks to 2 October, cutting its decline over the past 12 months to minus 34.1 per cent.

The overall trend was fairly broad-based across major lanes around the world, the company’s Neil Wilson wrote in a blog on the website.

But a leading theme again was the continuing rise of e-commerce business out of southern China. This was reflected in the index for outbound Hong Kong routes– still the biggest by volume in global air cargo—gaining 7.3 per cent over the month to leave its year-on-year (YoY) change at minus 32.3 per cent.

Outbound rates from Shanghai gained even stronger, rising some 19 per cent in October to leave the YoY change from there at only minus 28.2 per cent.

From other regions, rates were more mixed. Out of Europe, the index of outbound Frankfurt rates rose only slightly by 2.7 per cent month on month (MoM), leaving the YoY decline at minus 42.6 per cent.

And outbound London also edged up only a modest 4.5 per cent MoM, leaving its YoY change still a long way lower at minus 48 per cent.

From the Americas, Chicago rates ended a volatile month with a big rise, leaving the YoY change at -30.7 per cent. Rates on other lanes out of the United States were also generally on the rise.

And rates out of Vietnam ended the month with a big spike, indicating strong spot market activity.

In September, it seems major product launches started to feed through into rising rates, the blog noted. Some sources, however, remained sceptical, calling the rise a ‘dead cat bounce’.

Fibre2Fashion News Desk (DS)