Trading Update

Greater market pick-up across both the China to Europe and US trade lanes, up 3 and 4 cents respectively. The move into Q4 will inevitably trigger some of the higher spot and contract rates that will lift the figures out of their year-long negative trends.

Forward curves reflect front month price increases, spilling over into October for China to Europe, gaining 0.04 cents. Spreads remain wide, with October buyers holding on to spot-market levels.

Divergence of traditionally linked markets inside of China will prove difficult to forecast, particular given ongoing political uncertainty. 

Market Comment 

The airfreight market continues to whip from positive to negative, with the seasonal rate climb happening 1 month later than 2018, 2017, 2016 and 2015. Given the visibility of prices available today, effective reaction to market conditions is mandatory for carriers and forwarders in order to compete.

The big news is the clear transfer of cargo volumes out from Hong Kong through to Shanghai and Greater China. Beleaguered by continuous political strife, shrinking volumes, trade wars and over-capacity, rates out from Hong Kong continue to drop. Conversely Shanghai lanes resemble a slow but stable climb out from slack season. Although positive for the market, the shift of volumes presents significant volatility that can be hedged. Shanghai to Europe has jumped 4.74% in the past week.

All the while, it seems express volumes are up, indicating trade wars are damaging producers in China, Europe and the US, rather than having the desired trade re balancing effect. Container prices continue to sink, with FBX01 down 7% just prior to China's golden week.

Basket USD/KG CHANGE CHANGE % MTD
CHINA - EUR 2.49 0.03 1.22% 2.44
CHINA - USA 3.25 0.04 1.25% 3.22
Blended USD/KG CHANGE CHANGE % MTD
PVG/EUR 2.43 0.11 4.74% 2.31
HKG/EUR 2.55 -0.04 -1.54% 2.56
PVG/US 3.13 0.12 3.99% 3.08
HKG/US 3.37 -0.05 -1.46% 3.35
Airfreight Route (AR) Description PREVIOUS USD/KG CHANGE
AGR 1 HKG to LAX & ORD & JFK 3.38 3.41 0.89%
AGR 2 HKG to LHR & FRA & AMS 2.62 2.58 -1.53%
AGR 3 HKG to SIN & BKK & PVG 1.11 1.1 -0.90%
AGR 4 PVG to AMS & FRA & LHR 2.34 2.47 5.55%
Forward Curve - Indicative Update
CHINA - EUROPE | USD/KG
  BID ASK VALUE CHANGE
Sep-19 2.47 2.51 2.49 0.03
Oct-19 2.47 2.55 2.51 0.04
Nov-19 2.58 2.66 2.62 0.00
Q4 19 2.85 2.89 2.87 0.00
Cal - 19 3.04 3.14 3.09 0.00
Cal - 20 3.49 3.59 3.54 0.00
Forward Curve - Indicative Update
CHINA - USA | USD/KG
  BID ASK VALUE CHANGE
Sep-19 3.22 3.28 3.25 0.02
Oct-19 3.40 3.80 3.55 0.00
Nov-19 3.53 3.69 3.61 0.00
Q4 19 3.54 3.62 3.58 0.00
Cal - 19 3.40 3.50 3.45 0.00
Cal - 20 4.00 4.20 4.10 0.00