Air cargo rates remain exceptionally high, especially ex-China, where Freightos.com marketplace data indicates yet another increase of up to 30 per cent since last week.
Cancellation of a large proportion of passenger flights and the continued sky-high demand for critical supplies has kept air freight rates extremely high. Rates out of China are reaching record highs by some reports, with Freightos.com marketplace data indicating yet another 25 to 30 per cent increase across lanes since last week, on the heels of a similar price increase the week before.
The latest numbers from TAC Index show average air cargo rates from Shanghai to North America last week increased by 9.7 per cent on a week earlier to reach USD 7.59 per kg — the highest level recorded since the index started in March 2016.
Rates Hong Kong to North America, although high, were lower than China, at USD 5.16 per kg, down 5.1 per cent from a week earlier, according to derivatives broker Freight Investor Services (FIS).
Spot market rates escalated as high USD 14-16 per kg ex-China, driven by surging demand – mostly government driven – for medical supplies including personal protection equipment (PPE).
Prices out of China to Europe, meanwhile, have levelled off, with WebCargo data for dynamic rates even indicating a decline of 1.0 to 2.0 per cent since last week.
Rates from Hong Kong to Europe, according to FIS, hit USD 4.66 per kg, while at near record levels still represented a levelling out.
TAC notes rates from Shanghai to Europe last week saw a 1.6 per cent increase on the previous week to USD 8.79 per kg, with the rate of increase slowing.
This week’s developments to deal with this volatile air market included American Airlines introducing penalties for last-minute cargo cancellations, and the FAA issuing official guidelines for how to repurpose passenger jets as freighters, in an effort to add some cargo capacity.
Meanwhile, Freightos notes that the Coronavirus-driven consumer focus on essential items saw Amazon act to reduce their order volumes in mid-March through a policy change barring third party sellers from sending non-essential items directly to Amazon’s warehouses for its Fulfillment by Amazon (FBA) service.
Freightos.com marketplace data for FBA shipments indicate that the announcement quickly reduced volumes of FBA shipments to Amazon by 50 per cent week-on-week.
This restriction was removed last week from 13 April (week 16), but FBA shipments on Freightos.com actually recovered a week earlier. This early 55 per cent rebound might point to savvy FBAs succeeding in pivoting quickly and switching to selling essential goods – an interesting and encouraging indication of small and medium business (SMB) resilience and flexibility during this volatile time, Freightos says.