- Rates decreased overall by -2.1 percent week-on-week according to the TAC Index, reporting agent for the Baltic Air Freight indices, following the Golden Week holiday period.
- This is still +24.3 percent higher year-on-year, but market dynamics are indicating an interesting peak season as AI ‘hyperscalers’ are yet to secure all space predicted to be required.
- Fluctuations on routes as China rates fall slightly, but increases in rates from Hong Kong and South Korea.
The TAC Index (TAC), the reporting agency for air freight markets and calculating agent for the Baltic Air Freight indices, has reported global rates have edged lower last week. Baltic Air Freight Index (BAI00) saw a -2.1 percent decrease over the seven days until 12th October.
This is still 24.3 percent higher year-on-year, and follows the Golden Week holiday period pattern across China when factories commonly pause and volumes decrease, but sources told TAC that the market remained firm as it enters the traditional peak season.
AI ‘hyperscalers’
Some AI hyperscalers, the large cloud providers operating data centers, and scaling computing and storage behind the technology, have not yet secured space for the season.
This means that rates could be set to rise, as other eCommerce supplier and shippers with product launches telling TAC they had secured required spaces makes for a competitive backdrop as the Northern hemisphere’s winter looms.
China rates slight fall amid soaring fuel costs
Rates dipped week-on-week (WoW) from China to both Europe and the US, as the IATA Jet Fuel Price Monitor soared to +111.2 percent year-on-year (YoY).
Jet fuel prices have become the talk of the town from airports, supply and carriers working out how to negotiate the continuing Middle East disruption.
Marginal easing of rates on primary lanes out of China were not, however, reflective of general Far East pricing, with routes from Hong Kong and South Korea up WoW. The full index of outbound Hong Kong routes showed a +0.2 percent increase, and while almost all routes from Southeast Asia are much higher YoY there is variance in how much the average rise is.
Rates from India and Shanghai are, however, lower WoW, with Shanghai coming in at -2.1 percent. But the rates from Asia to Europe are on the whole weaker than the intra-Asia and Transpacific routes.
“The peak surcharges are the most I’ve seen in the industry, and started the earliest I’ve seen in the industry. So I think just you know capacity on any part of the the process is definitely a challenge this year,” Kelly Martinez, President at ePost Global commented.
A firmer Europe
Outbound European lanes gained WoW, especially on Transatlantic routes to the US, and lanes to China, India, Australia and South Africa. Sources confirmed to TAC that Europe to US ‘pass-through,’ or transhipment business is increasing.
Declines were, however, reported on lanes to Japan, Mexico and the UAE. Saudi Arabian closures are also impacting options, as hundreds of flights have been cancelled at the King Khalid International Airport in Riyadh since Houthi attacks on Saudi Arabian aviation infrastructure last weekend.
Frankfurt Airport gained +3 percent WoW, as London Heathrow bounced to +12.1 percent WoW, boosted by these gains to the US and also to the Middle East.
North America
WoW gains were seen on lanes to South America, led by a sharp rise in Miami International’s (MIA) southbound routes. MIA also eyed gains across the Atlantic, but North American rates fell to the UK, China and South Korea.
TAC reported after recent ‘hefty gains’ on outbound routes from Chicago, these fell by -29 percent WoW, with sharp falls to Asia. Rates from Mexico to Europe also fell, but in both of these cases, rates remained ‘well up’ YoY.
Source : https://aircargoweek.com/golden-week-makes-way-for-peak-season-preparations/