WorldACD: Global tonnages rebound from Asia holiday lull

Global air cargo tonnages rebounded with a +6% week-on-week increase in week 42 (13 to 19 October), according to the latest weekly figures from WorldACD Market Data, driven by a strong recovery in traffic from Asia Pacific origins following the end of China’s ‘Golden Week’ holiday period and other holidays in Asia. After dropping -3% the previous week due mainly to China’s mid-autumn festival and national holidays in Taiwan and South Korea, the +6% week-on-week (WoW) rebound in week 42 was stronger than that recorded in the equivalent week last year. Tonnages from Asia Pacific origins rose by +14%, WoW, after falling -9% the previous week, taking them +8% higher than in week 42 last year. Analysis by WorldACD, based on the more than 500,000 weekly transactions covered by WorldACD’s data, indicates that excluding the Asia Pacific upswing the data would show a modest +1% WoW rise in worldwide tonnages in week 42. Average worldwide rates were also restored to their level immediately prior to the holiday season, recording a +3% WoW increase to US$2.48 per kilo – based upon a mix of spot and contract rates – due chiefly to a +2% rise in Asia Pacific origin rates, and the rise in Asia Pacific volumes driving up the proportion of higher-yield cargo. That is slightly higher than the $2.45 per kilo recorded in the second half of September, although it is -4% lower than in week 42 last year. Spot rates showed a similar pattern, rising by +2%, WoW, in week 42 to $2.66 per kilo; and spot rates are also slightly down (-3%), year on year (YoY). Drilling down further into the post-holiday rebound from Asia Pacific in week 42 reveals a particularly strong WoW recovery of Asia Pacific to US tonnages (+17%, WoW), especially from China (+24%), Hong Kong (+22%), Taiwan (+24%) and South Korea (+96%), with the latter being due to recovery from that country’s ‘Chuseok’ (5-8 October) and ‘Hangeul’ (9 October) national holidays. In comparison, Asia Pacific to Europe tonnages rebounded by +14%, WoW, in week 42. Looking specifically at China and Hong Kong (CN/HK), CN/HK to US tonnages are below last year’s levels, whereas CN/HK to Europe tonnages are above last year – mainly reflecting diversion of CN/HK-origin e-commerce volumes from the US market to other destinations since the removal by the US of the ‘de minimis’ exemptions on low-value US imports. On the pricing side, after falling by -4% in the previous week, spot rates from Asia Pacific to the US rebounded with a +7% WoW increase, with spot rates rising especially strongly from China (+19%, WoW), Japan (+16%), Taiwan (+7%) and South Korea (+6%), whereas spot rates from Asia Pacific to Europe were flat. Those spot rate rises from Taiwan and South Korea to the US were, essentially, restoring rate levels that fell the previous week, but the increase from China to the US takes rates on that market to $4.90 per kilo – their highest level since mid April. That most likely reflects pressure on capacity in part due to importers attempting to front-load cargo ahead of threatened new higher US import tariffs on goods from China from next month – announced by the US on 10 October in response to restrictions by China on its ‘rare-earth’ exports. Higher US import tariffs have also led to an extremely volatile market in recent weeks for the India to US air cargo market. Following two weeks of strong increases in late September, tonnages ex-India to the US dropped for two consecutive weeks in weeks 40 and 41, but they bounced back strongly in week 42 with a +13% WoW increase, ahead of India’s Diwali festival holiday period (20-21 October) – which tends to cause pressure on capacity and delays in some cargo processing, bringing volumes on this lane +2% higher, YoY. In comparison, tonnages from India to Europe recorded a +9% WoW increase in week 42, taking India to Europe volumes +11% up on their level in week 42 last year. For Editorial Inquiries Contact: Editor Matt Driskill at [email protected] For Advertising Inquiries Contact: Head of Sales Kay Rolland at [email protected]