TRANSATLANTIC load factors and rates are falling, as increased passenger demand brings additional capacity to the routes.
Dynamic load factors across the Atlantic have fallen to about 60 per cent, according to Clive Data Services, reports London's Loadstar.
'For the first time since Covid, rates across the Atlantic have fallen to a par with the previous year,' said Niall van de Wouw, head of airfreight for Xeneta.
'Load factors are down, and rates are sliding to the level they were at last year - and still going down.'
The TAC Index shows rates on the route have fallen below US$4 per kg; Milan-US is now 5 per cent lower than a year earlier and Frankfurt to North America has fallen 9 per cent in a week, to $3.81. But the major declines started in mid-April.
US to Europe, however, is still 27 per cent higher than the previous year, but rates are just $2.14.
'Nobody knows how far rates will normalise - there is still quite a bit of room there,' said Mr van de Wouw. 'In 2019, rates were about $1.75/kg from Europe to North America, while last year they were at about $4. Where we will end up remains to be seen?'
'If it changes from a seller's to a buyer's market, rates could go down quite rapidly.'
He added that yields remained about 18 per cent higher than last year, but had been flat, and that it would be 'demand, not capacity' that would drive down rates further.
Flexport's principal supply chain economist, Chris Rogers, said today that inflation and interest rates were suppressing consumer confidence and hitting retail sales on both sides of the Atlantic.
'UK consumer confidence is at its lowest since the early 1970s, and retail sales have trended downwards for eight straight months as of April,' he noted, citing inflation of 9 per cent while wages have risen just 4 per cent, resulting in less disposable income.
The US retail market has also seen a slowdown in growth, falling to 0.9 per cent month on month in April, against an average of 2.4 per cent in the first quarter. US industrial production, meanwhile, increased 1.1 per cent in April over March, and was 6.4 per cent up on the previous year.
In terms of capacity, bellies on the Atlantic seem set to stay. IATA said passenger travel this year was expected to be about 65 per cent of 2019 levels, with Europe and North America making the fastest recovery.
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Dynamic load factors across the Atlantic have fallen to about 60 per cent, according to Clive Data Services, reports London's Loadstar.
'For the first time since Covid, rates across the Atlantic have fallen to a par with the previous year,' said Niall van de Wouw, head of airfreight for Xeneta.
'Load factors are down, and rates are sliding to the level they were at last year - and still going down.'
The TAC Index shows rates on the route have fallen below US$4 per kg; Milan-US is now 5 per cent lower than a year earlier and Frankfurt to North America has fallen 9 per cent in a week, to $3.81. But the major declines started in mid-April.
US to Europe, however, is still 27 per cent higher than the previous year, but rates are just $2.14.
'Nobody knows how far rates will normalise - there is still quite a bit of room there,' said Mr van de Wouw. 'In 2019, rates were about $1.75/kg from Europe to North America, while last year they were at about $4. Where we will end up remains to be seen?'
'If it changes from a seller's to a buyer's market, rates could go down quite rapidly.'
He added that yields remained about 18 per cent higher than last year, but had been flat, and that it would be 'demand, not capacity' that would drive down rates further.
Flexport's principal supply chain economist, Chris Rogers, said today that inflation and interest rates were suppressing consumer confidence and hitting retail sales on both sides of the Atlantic.
'UK consumer confidence is at its lowest since the early 1970s, and retail sales have trended downwards for eight straight months as of April,' he noted, citing inflation of 9 per cent while wages have risen just 4 per cent, resulting in less disposable income.
The US retail market has also seen a slowdown in growth, falling to 0.9 per cent month on month in April, against an average of 2.4 per cent in the first quarter. US industrial production, meanwhile, increased 1.1 per cent in April over March, and was 6.4 per cent up on the previous year.
In terms of capacity, bellies on the Atlantic seem set to stay. IATA said passenger travel this year was expected to be about 65 per cent of 2019 levels, with Europe and North America making the fastest recovery.
SeaNews Turkey