Asia Pacific and Europe rate rises lift global prices

Rising air cargo rates from Asia Pacific and Europe helped to raise average worldwide prices in the first week of the airline sector’s (northern) winter 2024-25 timetable from 27 October, according to the latest weekly figures and analysis from WorldACD Market Data.

Average worldwide air cargo rates in week 44 (28 October to 3 November) rose, week on week (WoW), by a further +2% to US$2.71, based on a full-market average of spot rates and contract rates, taking them +12% above their equivalent levels this time last year. Prices from Asia-Pacific and Europe origins rose by +2%, WoW, to $3.56 per kilo and $2.13 per kilo, respectively. Rates from Africa rose +3% to $1.98 per kilo, with prices stable from the regions North America, Central & South America (CSA) and Middle East & South Asia (MESA).

Worldwide spot rates, specifically, rose by +3%, WoW, to $2.97 per kilo, driven by a +3% increase from Europe origins to $2.34 per kilo, and a +1% rise from Asia-Pacific to $4.24 per kilo, with MESA rates edging up by +1% to $3.58 per kilo - representing year-on-year (YoY) increases of +9%, +26%, and +76%, respectively. Those increases in week 44 spot prices follow (WoW) increases in week 43 from Europe (+8%) and Asia Pacific (+3%), based on the more than 450,000 weekly transactions covered by WorldACD’s data. Contract rates from Asia-Pacific rose by a further +3%, WoW, in week 44, with those from Europe rising +2%.

However, tonnages flown in week 44 were down, WoW, on a worldwide basis and from all the main origin regions, although that mostly reflects national holidays in various parts of the world on 1 and 2 November.

Comparing the last two weeks with the preceding two weeks this year (a 2Wo2W comparison) reveals a +3% full-market increase in rates, 2Wo2W, driven by +4% increases from Asia-Pacific and Europe origins, taking average worldwide prices +12% higher, YoY. Capacity and flown chargeable weight are both down -1%, 2Wo2W, with capacity down -2%, YoY, while tonnages remain up (+5%), YoY, thanks to increases from all the main worldwide regions – including +6% increases from Asia-Pacific and North America, and +8% YoY growth from MESA and CSA origins.
Transatlantic westbound rate rises
The continuing increase in Asia Pacific rates in week 44, driven by rate increases from China, reflects ongoing strong demand from the region that has strengthened further in the final quarter. Meanwhile, the rise in spot rates from Europe origins, especially to North America, is partly a response to reductions in bellyhold capacity on the transatlantic market with the start of airlines’ winter season, and temporary cuts related to the national holidays last week.

The -6% WoW reduction in cargo capacity from Europe origins in week 44 helped to drive up load factors from their already somewhat elevated levels on the (head-haul) westbound transatlantic market. That rise in rates ex-Europe in week 44 did not take place in the equivalent week last year, when load factors on the westbound transatlantic market were several percentage points lower.
Asia-Pacific and MESA markets
Examining the Asia-Pacific market in more detail reveals a +12% WoW jump in spot rates from mainland China to Europe to $4.68 per kilo, and a +8% increase from Japan to $4.58 per kilo, taking them +26% and +42% higher than last year. But rates from China to the USA also increased in week 44, rising +3% to a new high at $5.90 per kilo.

Spot rates from MESA to Europe rose by further +4% in week 44 to $3.29 per kilo, almost double their level this time last year, with a +9% increase from the highly volatile Bangladesh market (to $5.12 per kilo) more than offsetting a -6% drop in spot rates from Sri Lanka origin cargo, from where tonnages flown have dropped in the last few weeks compared with their levels in September.