Hong Kong air cargo rates on key trades now ahead of last year
Rates on services from Hong Kong to Europe and North America are now ahead of last year’s levels as demand continues to surge.
The latest figures from the Baltic Exchange Airfreight Index (BAI) show that in April average all-in rates from Hong Kong to North America were up 6.5% year on year to $5.54 per kg.
Meanwhile, rates from Hong Kong to Europe in April increased by 12% year on year to $4.47 per kg.
April is the first time that rates on the two trades have simultaneously been ahead of last year’s levels since July 2022.
DHL Global Forwarding commented that the industry has experienced booming e-commerce demand this year, led by the fashion and consumer sectors.
Kathy Liu, vice president of global sales and marketing at Dimerco Express Group, said: “Particularly noteworthy is the surge in demand for air capacity, exceeding 50%, driven by e-commerce and e-cigarette in China, particularly in the southern regions.”
E-commerce firms Temu and Shein have been transporting huge volumes of cargo to the West, operating a model of flying goods from production to consumers.
This contrasts with the likes of Amazon which utilises container shipping and then warehousing in the end market before distributing to the consumer.
A June 2023 report from US congress shows Shein and Temu together send almost 600,000 packages to the US every day.
However, Liu added that Temu is now exploring alternative transport operations: “Temu has initiated sea/air routes via Taiwan, Japan, and Korea into the US, altering traditional trade patterns. Consequently, freight rates from these alternative routes are now exceeding those from mainland China — an unusual occurrence.”
Figures from data provider WorldACD show that demand out of Asia increased 13% year on year between April 8 and April 21.
As well as benefitting from booming e-commerce demand, there has been some ongoing modal shift due to the Red Sea shipping crisis.
In its weekly market update, rate data provider TAC Index also noticed rising rates out of China.
“Rates on the big lanes out of China continued to edge upwards, buoyed it seems by the continuing rise of e-commerce.
“The index of outbound routes from Hong Kong (BAI30) gained another +1.4% week on week to put it ahead by +11.8% year on year. Outbound Shanghai (BAI80) gained +2.4% week on week to put it up +12.0% year on year.
“However, rates out of Vietnam fell back a bit after recent strong gains. And rates out of India were fairly flat overall after an even stronger surge in recent months.”
