China to Europe spot rates continue to sink beyond the August levels, with the basket dropping a further 3 cents. This softening has since lost momentum over the past few weeks, with the forward market pricing in a slower price rise at the end of Q3. Q4 is still uncertain, with forward market trading activity unlikely to build until the end of September.
China to US gains slightly by 3 cents, climbing out of a consistently flat market over the past few weeks. Sep19 forward curve prices reflect contract interest given the minor rise in spot rates.
CAL20 is still priced in at a premium, reflecting confidence in year-on-year market growth beyond a disappointing 2019.
Market Comment
As Britain marches headlong into the jaws of a no-deal Brexit, the US and China continue their trans-pacific battle, sinking Brent and WTI oil prices. Any further reaction by the air/sea logistics market has yet to be seen, indicating the airfreight and container freight markets have already swallowed the dire impacts of volume decline.
The air freight market remains as unpredictable as the global political landscape, however indicative and traded interest provides confidence that the air freight rate will climb out of its summer lull in line with seasonal trends. The market holds on to an 8-15% decrease in spot rates since 2018, however near term softening of volume decline gives a glimpse of hope that prices will be unlikely to sink further.
With air freight markets acting purely at the whim of the wider economy, the 'canary in the coal mine' analogy rears its head once more.
| Basket | USD/KG | CHANGE | CHANGE % | MTD |
| CHINA - EUR | 2.35 | -0.03 | -1.26% | 2.35 |
| CHINA - USA | 3.19 | 0.03 | 0.95% | 3.19 |
| Blended | USD/KG | CHANGE | CHANGE % | MTD |
| PVG/EUR | 2.20 | -0.04 | -1.79% | 2.20 |
| HKG/EUR | 2.50 | -0.03 | -1.19% | 2.50 |
| PVG/US | 3.18 | -0.06 | -1.85% | 3.18 |
| HKG/US | 3.21 | 0.12 | 3.88% | 3.21 |
| Airfreight Route (AR) | Description | PREVIOUS | USD/KG | CHANGE |
| AGR 1 | HKG to LAX & ORD & JFK | 3.13 | 3.17 | 1.28% |
| AGR 2 | HKG to LHR & FRA & AMS | 2.6 | 2.52 | -3.08% |
| AGR 3 | HKG to SIN & BKK & PVG | 1.17 | 1.12 | -3.08% |
| AGR 4 | PVG to AMS & FRA & LHR | 2.25 | 2.25 | 0.00% |
| Forward Curve - Indicative Update | ||||
| CHINA - EUROPE | USD/KG | ||||
| BID | ASK | VALUE | CHANGE | |
| Sep-19 | 2.41 | 2.51 | 2.46 | 0.04 |
| Oct-19 | 2.43 | 2.51 | 2.47 | 0.01 |
| Nov-19 | 2.51 | 2.60 | 2.56 | 0.00 |
| Q4 19 | 2.85 | 2.89 | 2.87 | 0.00 |
| Cal - 19 | 3.04 | 3.14 | 3.09 | 0.00 |
| Cal - 20 | 3.44 | 3.54 | 3.49 | 0.00 |
| Forward Curve - Indicative Update | ||||
| CHINA - USA | USD/KG | ||||
| BID | ASK | VALUE | CHANGE | |
| Sep-19 | 3.18 | 3.24 | 3.21 | 0.70 |
| Oct-19 | 3.23 | 3.30 | 3.26 | 0.00 |
| Nov-19 | 3.29 | 3.60 | 3.45 | 0.00 |
| Q4 19 | 3.55 | 3.65 | 3.60 | 0.00 |
| Cal - 19 | 3.91 | 4.01 | 3.96 | 0.00 |
| Cal - 20 | 4.12 | 4.22 | 4.17 | 0.00 |
