WorldACD: Air Cargo Rates from Asia-Pacific Continue to Climb

The latest data from WorldACD shows that spot rates from Asia-Pacific (APAC) continued to rise in the first week of November, pulling global rates up, even as total tonnage dipped due to short-term disruptions.

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Spot air cargo rates from Asia-Pacific (APAC) markets continued their upward trend through the first full week of November, giving a slight lift to global average and spot rates, even as overall global tonnage dipped week-over-week (WoW).

According to the latest figures from WorldACD Market Data, in week 45 (November 3-9), spot rates from APAC edged up by +2% (WoW) to $3.99/kg. This momentum pushed global spot rates up by +1% (WoW) to $2.78/kg.

The picture for volumes, however, was the opposite. Total global tonnage in week 45 fell by -3% (WoW), as chargeable weight declined from APAC, North America, and Central/South America (all -3%), and dropped by -2% from the Middle East & South Asia (MESA) and Africa.

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Source: WorldACD

Short-Term Disruptions

The drop in tonnage from Asia-Pacific was partly due to one-day national holidays in Japan (volumes down -11% WoW) and Malaysia. Other factors potentially affecting air capacity included Typhoon Kalmaegi, although its impact in week 45 was mostly limited to the Philippines.

In the United States, the federal government shutdown caused only limited cancellations in the domestic market. The Federal Aviation Administration's (FAA) decision to ground the MD-11 fleet was issued on November 8 (near the end of week 45), although some operators had voluntarily paused their MD-11F flights earlier following the UPS accident on November 4.

Market Context: Don't Be Fooled by Year-on-Year Comparisons

Looking at the bigger picture, global capacity in week 45 was stable compared to the previous week. A two-week-on-two-week (2Wo2W) analysis shows capacity was down -1% versus the preceding two weeks. During this period, the drop in belly capacity after the end of the summer airline peak season was almost completely offset by an increase in freighter capacity.

This year's market pattern (relatively stable but slightly declining tonnage, while rates continue to rise) is quite similar to last year, as the market prepares for key peak events like Black Friday, Thanksgiving, and Christmas.

However, the crucial point lies in the absolute comparison:

• Tonnages: +6% higher than the same period last year (YoY).

• Rates: -4% lower than the same period last year (YoY).

This paradox is explained by the unique context of 2024. It's important to remember that average air freight rates during this period last year were extremely high (spot rates in week 45/2024 were +23% higher than in 2023) because the market was experiencing a severe "capacity squeeze," especially from China, due to soaring e-commerce volumes.

Therefore, this year's lower rates are actually being compared against an exceptionally high 2024 baseline and are, in reality, "relatively high by historical standards."

The Transpacific: The Rise of Southeast Asia

Looking deeper into the Asia-Pacific market, the rate increase pattern this year is quite similar to last year (spot rates up +$0.26/kg in the last 4 weeks, vs. +$0.29/kg in 2024). But in absolute terms, the current $3.99/kg is -7% lower than last year's $4.30/kg.

On the APAC to U.S. lane in week 45, a major divergence is underway:

• Tonnage (YoY): Total volumes were up slightly by +2% YoY.

• The Divergence: Southeast Asia (SEA) saw explosive growth (from +30% to +50%), while Northeast Asia (NEA) declined (Mainland China -9%, Hong Kong -14%, South Korea -18%).

• Rates (YoY): The average spot rate fell -15% (to $5.39/kg), with double-digit drops from most markets, with the exception of China (which only fell -9% YoY).

Asia-Europe: Signs of Real Growth

In contrast to the U.S. route, the APAC to Europe lane showed more positive signals:

• Tonnage (YoY): Grew significantly at +9% YoY.

• Rates (WoW): Increased slightly by +2% to $4.20/kg.

• The Bright Spot from China: Spot rates from China to Europe rose +5% (WoW) to $4.56/kg, and notably, were +6% higher year-on-year (YoY), bucking the market's general downward trend.

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