The disturbance in Red Sea maritime traffic hasn’t yet had a significant impact on air cargo rates, as indicated by the latest data from the TAC Index. Despite a notable decrease during the Christmas to New Year period as the peak season concluded, the overall Baltic Air Freight Index experienced an additional 6.6 percent drop in the week ending January 8, resulting in a 31.8 percent decline over the past 12 months.
Following the holiday period decline, rates from China further decreased in the first week of the year. The outbound rates index from Hong Kong, for instance, fell by an additional 5.9 percent week over week, marking a 15.5 percent year-over-year decrease. Shanghai’s outbound rates witnessed a more significant 7.3 percent week-over-week drop, resulting in a 27.9 percent year-over-year decline. However, rates to Europe showed a slight increase, indicating a trend where some shippers are opting for combined sea-air transport, utilizing sea routes from Asia to the Middle East and then air transport to Europe to meet delivery deadlines. This strategy is expected to become more prevalent in the coming weeks as numerous factories have only recently resumed operations since the new year.
Index levels from all major outbound locations were lower, with Europe experiencing a comparatively lesser decline. Outbound Heathrow, for instance, only decreased by 1.1 percent week over week, supported by higher rates to South East Asia, though still exhibiting a substantial 50.6 percent year-over-year decrease. Outbound Frankfurt fell by 4.9 percent week over week, with increased rates to South East Asia, resulting in a 44.8 percent year-over-year decline.
Rates from the U.S. were declining more sharply on various routes, with outbound Chicago experiencing a 12.7 percent week-over-week drop, leading to a significant 54 percent year-over-year decrease. Rates from the U.S. to both Europe and China were decreasing, but there was a notable increase in rates to South America, including a 5.6 percent week-over-week gain from Miami.
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