Ex-Asia air freight rates surge again this week

Ex-Asia air freight spot prices have surged again in the last week above their already “super-peak” levels, with prices from Shanghai to the US west coast rising by almost 15% in the week to 26 April, according to figures from TAC Index.

The latest price spike builds upon rates that have already surged by more than 50% in the past few weeks, rebounding back to and beyond their super-peak level in December to an average of US$8 per kilo. As reported last week, average prices from China and Hong Kong to the US had risen by mid-April by more than half in just four weeks even before this week’s increases.

Figures this week from TAC Index show prices on several major lanes surging again from Shanghai to the US, registering a rise of almost 9% in the week to 26 April to $8.47 per kilo. Prices from Hong Kong to the US rose by a more modest 4% in the same week but to a similar average composite level of $8.65 per kilo. Within TAC’s composite figures, spot rates from Shanghai to Los Angeles (LAX) rose by almost 15% (14.9%) to more than CNY 55 (US$8.48) per kilo.

Super-peak levels

In a fresh update this week, US freight forwarder Flexport said ex-Asia air freight “remains at super-peak levels with rates in some origins like TPE and BKK approaching the levels only seen in May 2020 during the height of the PPE frenzy. With demand outstripping capacity, flights are full across the board until middle of May at the earliest.”

Flexport said the current market conditions were “expected to continue through June, based on large amount of cargo in pipeline”.

It also noted that China’s Civil Aviation Authority (CAAC) “will also not permit extra freighter flights from PVG in May due to airport congestion and a lack of ground handling equipment”. Flexport said additional charters not already approved will need to use alternative airports such as CAN (Guangzhou) and SZX (Shenzhen).

Meanwhile, rates from Shanghai to Europe’s largest cargo airport, Frankfurt, also saw a double-digit increase in the week to 26 April, rising more than 11% to almost CNY 33 per kilo. A composite average price from Shanghai to key European airports rose by almost 9% in the week to 26 April to an average of US$4.77. Average prices from Hong Kong to European destinations rose by more than 6% to just over US$5 per kilo during the same period.

The highest increase on the lanes covered by TAC index was Singapore-South East Asia, which recorded an increase of more than 17% to an average of SGD 2.65 per kilo.

Yigit Saricinar, regional air freight director for Asia Pacific (APAC) at freight forwarder Geodis confirmed to Lloyd’s Loading List that ex-Asia transpacific air freight spot rates had spiked in recent weeks, in response to strong demand for high-tech goods and COVID-19 related products.

“In the last few weeks, prices from Shanghai and Hong Kong to the US and to Europe have rebounded back to their levels in December,” Saricinar noted. “There has been a sharp increase in rates, especially into the US and average transpacific prices have increased more than 50%.

“China-Hong Kong to Europe rates remain at more modest levels but we still see spikes. Demand continues to surge especially for high-tech goods and COVID related products such as test kits and capacity continues to be extremely tight.”

In its latest weekly freight update this week, digital rates specialist Freightos said prices from Asia to the US have increased by about 25% to most destinations so far this month, “and are hitting levels not seen since the tail end of the PPE rush last May,” pushed by new (consumer) electronics releases and rapid COVID testing kits.