THE Baltic Exchange Airfreight Index (BAI) has reported a decline in prices for air freight services between Asia and Europe, Asia and North America, and across the Atlantic, reports London's Air Cargo News.
This is unusual, as rates typically increase or remain stable in April compared to March.
In April, the average price paid by forwarders for services from Hong Kong to North America declined to US$5.20 per kg, compared to $5.38 per kg in March.
Rates on this trade have fallen 45.7 per cent compared to last year but are still above the pre-Covid 2019 level of $3.60 per kg.
Similarly, rates on services from Hong Kong to Europe declined to $3.99 per kg in April from $4.15 per kg in March.
Rates for this trade are down 33.6 per cent from last year but remain above the pre-Covid 2019 level of $2.65 per kg.
The average prices for Frankfurt to North America in April fell to $3.08 per kg from $3.37 per kg in March. Rates on this trade are down 43 per cent from last year, but are still above the pre-Covid level of $2.19 per kg.
Although market indicators had suggested a slight improvement in the early part of the year, the rate drop indicates that this trend may have eased temporarily in April.
Stifel Investment Bank director Bruce Chan recently highlighted the uncertain outlook for the industry.
'As we look out over the next year, there are several countervailing factors to consider, in terms of likely magnitude and even timing,' said Mr Chan.
'On the demand side, supply chain congestion has abated, which means less need for expedited freight. But consensus continues to build around the likelihood of a 2023 inventory restocking, which, even if mild, may see the re-emergence of a peak season.'
'All the while, logistics networks are realigning as shippers seek to diversify production sources across suppliers and geographies after three years of hard-learned lessons on supply chain resiliency,' said Mr Chan.
'And finally, looming in the background of all of these demand discussions is what we see as significant, residual tail risk -factors that may not be extremely likely, especially (hopefully) from a geopolitical, multi-national conflict, or global financial institutional stability angle, but could produce significant disruption to the macro picture.'
SeaNews Turkey
This is unusual, as rates typically increase or remain stable in April compared to March.
In April, the average price paid by forwarders for services from Hong Kong to North America declined to US$5.20 per kg, compared to $5.38 per kg in March.
Rates on this trade have fallen 45.7 per cent compared to last year but are still above the pre-Covid 2019 level of $3.60 per kg.
Similarly, rates on services from Hong Kong to Europe declined to $3.99 per kg in April from $4.15 per kg in March.
Rates for this trade are down 33.6 per cent from last year but remain above the pre-Covid 2019 level of $2.65 per kg.
The average prices for Frankfurt to North America in April fell to $3.08 per kg from $3.37 per kg in March. Rates on this trade are down 43 per cent from last year, but are still above the pre-Covid level of $2.19 per kg.
Although market indicators had suggested a slight improvement in the early part of the year, the rate drop indicates that this trend may have eased temporarily in April.
Stifel Investment Bank director Bruce Chan recently highlighted the uncertain outlook for the industry.
'As we look out over the next year, there are several countervailing factors to consider, in terms of likely magnitude and even timing,' said Mr Chan.
'On the demand side, supply chain congestion has abated, which means less need for expedited freight. But consensus continues to build around the likelihood of a 2023 inventory restocking, which, even if mild, may see the re-emergence of a peak season.'
'All the while, logistics networks are realigning as shippers seek to diversify production sources across suppliers and geographies after three years of hard-learned lessons on supply chain resiliency,' said Mr Chan.
'And finally, looming in the background of all of these demand discussions is what we see as significant, residual tail risk -factors that may not be extremely likely, especially (hopefully) from a geopolitical, multi-national conflict, or global financial institutional stability angle, but could produce significant disruption to the macro picture.'
SeaNews Turkey
