Air Freight Rates from China Are Climbing

Prices for one-way air freight charter flights have soared to US$1.5 million as capacity is getting tighter during peak seasonal demand periods, reports Lloyd’s List based on the figures from Flexport.

It will still be very difficult to find the available capacity for transportation until December at best. The capacity has become even tighter on the lanes from Asia to North America and Europe.

Flexport’s Europe air trade lane manager, Camille Carenton, confirmed that one-way charter flights now cost from US$1.2 to US$1.5 million. For reference, last year the rates were at the level of US$1 million, and around US$500,000 in 2019 before the pandemic.

The factors standing behind the rise in prices include peak seasonal demand going along with the decrease in supply due to cancellation of flights at China airports, worsening coronavirus situation and recent typhoons, as well as reorientation of freight traffic from sea to other modes due to the existing crisis in the ocean container shipping industry.

Carenton also drew her attention to the trend which is not typical for the market. Peak demands are common around China’s Golden Week and then during European Christmas . But this year due to all the disruptions the peak season is most likely to keep going until Christmas.

Increase of air freight rates – up to 18%

Air freight spot rates on the lanes from Asia rose again during week 37 hitting the highest level this year and getting close to all-time records. Referring to the latest figures from the Baltic Air Freight Index (BAI), Lloyd’s Loading List reports that the increase in the rates was significant from Hong Kong (HKG) and Shanghai (PVG) to North America and Europe.

The BAI figures show that the average spot rates on PVG to North America increased by a further 4% during week 37 to US$11.43 per kilogram, while the rates from HKG increased by more than 8% over the same week soaring above the US$10 mark.

Shipping prices to Europe are growing even faster. Spot rates on the lanes from PVG rose more than 18% during that week from US$6.06 to US$7.19 per kilogram and the prices from HKG increased by more than 13% from US$5.24 to US$6.04 per kilogram.