Airfreight rates on transpacific routes have levelled off as an oversupply of capacity outpaces demand. However, experts caution that supply chain turbulence could cause rates to climb in the near future.
According to World ACD’s Week 47 data, global average airfreight rates rose by 2%, reaching $2.79 per kg—the highest level recorded this year. This growth was primarily driven by increasing spot rates originating from North America and Europe.
While a rise in rates might seem unexpected, World ACD attributes this to a capacity shift. Airlines have been reallocating space from transatlantic routes to the Asia Pacific region in anticipation of a surge in shipments from China and Hong Kong to Europe and North America. However, global tonnage remained flat compared to the previous week.
Breaking it down further, rates from Asia Pacific to North America showed no significant weekly changes but remain 10% higher year-on-year. In contrast, Europe-to-North America rates experienced an 8% week-on-week increase, reflecting shifting market dynamics.
Capacity trends are also telling: according to Rotate’s market intelligence, capacity from Asia Pacific to Europe rose by 7% month-on-month, with a 4% increase from Asia to North America. However, Europe-to-North America capacity dropped by 4% during the same period. Year-on-year, transatlantic capacity dipped by 3%, largely due to a 10% reduction in freighter capacity.
Interestingly, World ACD highlighted that more forwarders secured capacity in advance this year, dampening the dramatic rate hikes traditionally seen during peak season.
“Potential potential cost increases due to threatened tariffs in the US could drive a significant increase in air freight activity… potentially leading to tighter space and higher shipping rates”
Kathy Liu, VP of global sales and marketing at Dimerco Express Group
As airlines and shippers navigate these evolving trends, the market remains poised for potential shifts in the weeks ahead.
Comments