Asia air freight 'very strong' despite CNY holiday

The Asia air freight market has remained very strong despite the Chinese New Year (CNY) holiday being in full swing, with the combination of strong demand and very little available capacity resulting in peak-level rates , according to Flexport's latest weekly update.

Rates are highest out of North Asia and Southeast Asia on both the Transpacific eastbound (TPEB) and Far East westbound (FEWB) trade lanes, the US forwarder reported.

“Given the recent (COVID) quarantine restrictions in Hong Kong , forcing Cathay Pacific to cancel over 30% of their long-haul schedule effective 20 February, high rates and a very capacity constrained market are expected for the foreseeable future.”

While rates remain high, capacity ex-Europe to Asia is constrained due to CNY. Capacity to North and South America has been further constrained due high demand driven by automotive & manufacturing and the pharma industries, while some carriers dialed back on numbers of flights, Flexport noted.

“Capacity constraints have led to even more increases of underlying air freight rates to North and South America while the EU's main airports are fully operational and continue to show strong throughput numbers.

Turning to the Americas, Flexport said theTPWB trade is showing slower demand into all Asia hubs due to CNY and carriers are working through some of the backlogs reported last week on the West Coast and Midwest into Hong Kong and Japan. Cancellations during CNY throughout this week are in effect with most flights being reinstated at the end of this week going into next week.

Latin America outhbound continues to see increased activity with backlogs reported to destinations such as Chile, Brazil, Argentina, “but capacity is gradually infused into the market again, after a peak flower season due to Valentines Day. Capacity to Central America remains heavily constrained.”

Transatlantic eastbound capacity is available to Continental Europe and the UK and carriers are reporting high load factors and stable rates, Flexport added.