Air cargo rates from China have surged in the final full week ahead of Lunar New Year (LNY) on 10 February, according to the latest figures from WorldACD Market Data, as shippers rush to get goods shipped before the LNY holiday period. Fresh analysis this week by WorldACD reveals that rates for air cargo shipments from China to North America rose by +14%, week on week (WoW), in week 5 (29 January to 4 February), although rates are still well below their level in early December. Similarly, China to Europe rates rose by +8%, WoW, although rates on this lane are also still well below their fourth-quarter peak levels in early December.
It is unclear to what extent this pre-LNY demand is being boosted by the disruptions and delays to container shipping in the Red Sea, which have also reportedly led to some conversion of China-Europe sea freight to sea-air shipments, via the Gulf and to some extent via the US west coast. Air cargo prices from the Gulf to Europe remained broadly flat in week 5, WoW, and below their level in early December, WorldACD data indicate.On the tonnage side, WorldACD data continue to indicate strong traffic demand levels from China to Europe, as well as to North America, and also ex-Gulf to Europe, whereas this time last year traffic was slowing down, although it is impossible to measure the extent of the Red Sea impact on this traffic due to the huge impact of LNY. Indeed, the magnitude of the Red Sea impact on air freight will probably only become clear well after LNY, when it may be possible to identify whether we have structurally different flows, depending also on the development of that crisis and many other factors. Meanwhile, on a worldwide basis, the recent surge in traffic ex-China has helped cause overall global air cargo demand and rates to continue to rise in the days leading up to LNY, with worldwide tonnages so far this year significantly higher than the equivalent period last year, according to the latest figures from WorldACD.
READ: Tonnages build ahead of Lunar New Year
Weekly analysis
Revised figures for January show a +15% increase in tonnages compared with January 2023, based on the more than 400,000 weekly transactions covered by WorldACD’s data, and there was a further slight increase in tonnages in week 5 (29 January to 4 February), the final full week ahead of LNY, with average global rates up by around +2% compared with the previous week.The figures are skewed by LNY falling on 22 January last year, with the week following LNY typically seeing a significant drop in tonnages ex-Asia Pacific. Nevertheless, as noted last week, there has been an underlying trend of higher year-on-year tonnages for several months, boosted by strong e-commerce traffic demand ex-Asia Pacific since the final quarter (Q4) of last year and with some limited conversion of sea freight to air and sea-air cargo in recent weeks due to the disruptions to container shipping in the Red Sea.
Expanding the comparison period to two weeks, total combined tonnages for weeks 4 and 5 this year were up by +9%, globally, compared with the preceding two weeks (2Wo2W), with average rates up by +1% and capacity up +2%.
Outbound tonnages rose from all of the main global air cargo origin regions, on a 2Wo2W basis, including double-digit percentage increases from Central & South America (+33%) and North America (+10%). Tonnages ex-Europe rose by +7%, and there were increases of +6% ex-Asia Pacific, ex-Middle East & South Asia, and ex-Africa. Most of the main intercontinental lanes recorded increases in tonnages, on a 2Wo2W basis, with demand from Central & South America to North America recording by far the biggest increase (+44%). As noted last week, this surge reflects a spike in demand for flowers in North America for Valentine’s Day on 14 February, with South America to North America the world’s largest air cargo flower market. But with flower shipments a relatively low-yield trade, average rates on that lane fell by -10%.The second-biggest 2Wo2W tonnage increase was from Central & South America to Europe (+17%), although there was also a strong rise ex-North America to Europe (+16%) and from Middle East & South Asia to Europe (+13%). That tonnage rise from Middle East & South Asia to Europe will include some conversion of sea freight to sea-air cargo due to the disruptions in the Red Sea, with average rates on that lane also up somewhat (+4%). Having seen strong increases last month, tonnages from Asia Pacific to Europe were relatively stable in weeks 4 and 5 compared with the previous two weeks (+1%), although rates were up significantly (+6%). And there was a rise in both tonnages and rates from Africa to Europe of +6%.Other substantial 2Wo2W tonnage increases included a surge in transpacific traffic on both directions, rising +10% eastbound and +9% westbound, accompanied by a +3% rise in rates on the head-haul direction ex-Asia Pacific to North America.
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Year-on-year perspective
Year-on-year (YoY) comparisons also reveal some big changes this year, although these are largely explained by the difference in the timing of LNY. Indeed, total worldwide tonnages for weeks 4 and 5 this year were up by +25% compared with last year, although those figures are massively skewed by a +70% rise ex-Asia Pacific. The other big YoY tonnage difference was a +20% rise ex-Middle East & South Asia, most likely in part reflecting some conversion of Asia Pacific to Europe traffic to sea-air.On the pricing side, average worldwide rates of US$2.35 per kilo in week 5 are -16% below their elevated levels this time last year, although they remain significantly above pre-Covid levels (+32% compared to February 2019). Overall worldwide air cargo capacity remains significantly up on last year’s levels (+15%), boosted by a +33% rise ex-Asia Pacific and a +18% rise ex-Central & South America, although there are also double-digit percentage rises ex-Middle East & South Asia (+14%) and ex-Africa (+10%).
 on 10 February, according to the latest figures){kind=link}