The demand of e-commerce has emerged as the principal impetus for the growth of the global air freight market. Two-thirds of the air cargo volume in China originates from e-commerce operations.
Against this backdrop, cargo aircraft operators are also seizing the opportunity of the surging demand to drive up the freight rates.
A freight forwarder in Shanghai stated, “We are currently in the annual peak period of air freight. This week, the freight rates to Europe and the United States have exceeded the peak of last year.
This is not surprising. The main driving force comes from e-commerce, and it is anticipated that e-commerce goods will constitute two-thirds of the overall air cargo volume.
According to data from WorldACD, the air freight rates for the global all-market rose by 2% to $2.84 per kilogram as of December 1, setting a new high for the year. Spot freight rates rose by 3%, with a 4% increase in the Asia-Pacific region and a 3% increase in North America. As the Thanksgiving holiday in the United States came to an end, capacity began to stabilize.
STRONG GROWTH IN ASIAN MARKETS AND A SHARP RISE IN FREIGHT RATES
WorldACD also noted that weekly air freight rates in specific Asian markets such as China, Hong Kong, Taiwan, Japan, South Korea, and Vietnam have seen significant increases. Specifically:
Japan: $4.97 per kilogram, up 6% from the previous week
South Korea: $5.49 per kilogram, up 6% from the previous week
Vietnam: $4.88 per kilogram, up 3% from the previous week
China: $5.10 per kilogram, up 7% from the previous week
Hong Kong: $6.25 per kilogram, up 9% from the previous week
Taiwan: $4.07 per kilogram, up 5% from the previous week
All of these markets are experiencing higher air freight rates compared to the same period last year, with particularly high year-on-year increases in Japan and Vietnam, with increases of over 30%, and Taiwan with an increase of 46%.
Despite the current high demand in the market, industry insiders believe that demand may ease in the short term. “We expect there may be a brief drop in freight rates during the Christmas period, but with the Chinese New Year (January 28) approaching, demand will surge again.”
However, he also noted that freighter operators were taking advantage of future capacity tightness – such as port strikes on the East Coast and Bay Area, the imposition of new tariffs and wholesale scheduling changes by carriers – to increase contracted rates.
“Some major operators have significantly increased their annual BSA prices in Europe by more than $1.40 per kg, which is significantly higher than 2024 rates. As far as I can remember, it’s been a record high for the last many years.”
“The imposition of U.S. tariffs on Chinese imports in early 2025 is expected to prompt companies to rush shipments before the tariffs take effect, triggering a demand surge in the first quarter of 2025,” CargoFacts Consulting said.”This wave of demand will put additional pressure on logistics networks and tight air capacity will push rates even higher.”
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