Soaring air cargo spot rates from Bangladesh and Japan and a surge in tonnages from Dubai have further boosted an already buoyant air cargo market in the first half of September, according to the latest weekly figures and analysis from WorldACD Market Data. Worldwide air cargo tonnages flown increased by +4% in week 37 (9-15 September), week on week (WoW), driven by a +5% increase from Asia Pacific origins, a +6% increase from Central & South America (CSA), and a rebound of +10% from North America origins, linked to Labor Day on 2 September.
Average worldwide rates edged up slightly further to US $2.58 per kilo, based on a full-market average of spot rates and contract rates, with a +1% further increase from Asia Pacific origins partially cancelled out by a -2% drop from Middle East & South Asia (MESA) origins. Nevertheless, average worldwide rates from those two regions are up, year on year (YoY), by +24% and +53%, respectively, helping drive average worldwide prices +14% higher, YoY, and more than +50% above pre-Covid levels (September 2019). That overall worldwide increase comes despite YoY falls in average rates from North America (-8%), Europe (-8%), CSA (-3%) and Africa (-2%).
The increases in tonnages in week 37 are broadly in line with the pattern last year, and most likely represent an early indication of a strengthening in the market in the lead-up to what is expected to be a strong fourth-quarter peak season. Notable differences this year include the ongoing exceptionally strong demand and high rates from MESA origins, as WorldACD has regularly highlighted.
Rates from MESA origins have been highly elevated for much of this year, bolstered by the disruptions to ocean freight supply chains caused by the attacks on shipping in the Red Sea. Indeed, since week 14, average spot rates from MESA origins to Europe have been more than double their levels last year, with spot rates from India and Bangladesh to Europe more than +150% higher for most of that period.
Although average spot rates from India to Europe have fallen back to around US$3.30 per kilo in recent months from their highs of more than $4 in April, spot rates from Bangladesh to Europe continue to rise, exceeding $5 per kilo for the last three weeks, as political unrest and logistics disruptions continue to affect this key textile export nation. But the effects on spot rates from Bangladesh to the USA are even more pronounced, with rates soaring above $7 a kilo for the last four weeks. At $7.49 per kilo in week 37, Bangladesh to USA spot rates are more than three times their levels this time last year (+219%).
Other particularly noteworthy recent developments within MESA include a major surge in tonnages from Dubai to the USA, increasing by around 50% in the last four weeks, taking tonnages to more than three times their level last year (+275% in week 37).
Meanwhile, spot rates to the USA from China and Hong Kong have been relatively stable in recent weeks at between $5 and $5.50 per kilo, up around +25%, YoY. But from other origins in Asia Pacific, including Japan and Southeast Asia, spot rates have risen significantly in recent weeks. And specifically in week 37, average spot rates to the USA from Thailand ($6.79), Singapore ($6.76), and Malaysia ($6.60), are at or close to their highest levels this year, and close to double their levels this time last year. And from Japan, where air services have been disrupted in recent weeks by typhoons, spot rates to the USA soared above $8 per kilo ($8.33) in week 37, their highest level this year. That’s an increase of around +50% compared with their average levels three months ago, in mid-June.