Air freight rates up at the end of January
Par Ibrahima DIALLO
30 January 2024 / 15:51

Air freight rates in January rose as the month progressed due to the approach of the Lunar New Year vacations and anecdotal reports of a shift from sea to air due to the Red Sea crisis.

The latest figures from the Baltic Exchange Air Freight Index (BAI) show that in the last full week of January, rates from Hong Kong to North America rose by 8.4% on the previous week to $5.15 per kg.

From Hong Kong to Europe, prices rose by 4.5% last week to $4.16 per kg. Air freight rate data provider TAC Index said the increase was expected.

"The increase is in line with expectations that rates could spike following the Red Sea shipping disruption, although sources also point out that rates often rise in the run-up to Chinese New Year," said TAC in a weekly market roundup.

This year, the Lunar New Year vacation falls on February 10, compared with January 22 last year. Freight forwarders reported increased interest in air-sea and airfreight services following the disruption in the Red Sea.

Although rates rose this week, overall prices for the month were down on last year. BAI figures show that January rates from Hong Kong to North America were down 15% year-on-year to $5.22 per kg, while rates from Hong Kong to Europe were down 16.9% to $4.12 per kg.

Route fares have been trending downwards since the third quarter of 2022, as the aviation market began its slow recovery from the Covid pandemic. At the same time, consumer spending has been affected by a cost-of-living crisis, leading to a slowdown in demand for air freight.

IATA expects rates to continue to fall this year, with yields down 20.9%, as carriers continue to add capacity to the market.

However, prices in January were still higher than in 2019, before the pandemic, when carriers had reached $3.66 per kg from Hong Kong to North America and $2.83 per kg from Hong Kong to Europe.

Damian Brett

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