Global Airfreight Market - Global airfreight rates are experiencing a modest uplift, primarily fueled by specific demands for commodities like aluminum and high-tech components, including AI servers. However, despite this recent increase, freight forwarders are largely tempering expectations, suggesting that a traditional peak season surge is unlikely to materialize this year.
The TAC Index, which recently expanded its daily spot air freight indices to include new routes from Hong Kong, India, and Korea, reported a 3.3% gain in its Air Freight Index for the week ending October 27. This marks the second consecutive week of strong gains. While the index is still down 3% year-on-year, this pattern has some observers drawing parallels to the beginnings of a typical peak season rise, which historically accelerates into the US ahead of Thanksgiving and into Europe in the run-up to Christmas.
However, industry sources caution that other factors might be at play. These include reduced capacity on certain lanes, notably the transpacific route, and some front-loading of goods ahead of potential (though now less likely) changes to tariffs and trade rules.
Forwarders on the ground remain skeptical about a full-blown peak season. A Europe-based forwarder commented, "Rates have been going up slightly... It has been going up a little bit from Asia to Europe and US, but it’s not crazy." A key indicator of this tempered outlook is the notable absence of peak season surcharges, which airlines would typically have started implementing by now. "But there are no peak season surcharges in the market at all," the forwarder emphasized.
Any current rate increases might also be non-organic, with some carriers attempting to push up rates to compensate for a year of subdued earnings. However, forwarders suggest that this isn't necessarily impacting customers significantly due to ample capacity still available in the market.
Niche Demands Driving Current Increases:
Two specific demand drivers are being highlighted by forwarders:
Aluminum: Despite new 50% US tariffs, a fire last month at a major mill facility in New York, which supplies about 40% of the US sheet aluminum, has led to scarce supplies. This shortage is expected to last until the end of the year or early next year, prompting an urgent need for airfreight solutions, including "a big project in Europe to the US with aluminum coils."
AI Servers and High-Tech Exports: Dimerco, another prominent logistics provider, noted a "sharp rebound in transpacific air demand," leading to a "year-end surge driven by aluminum and hi-tech exports." This indicates a strong, albeit specialized, demand for high-value technological goods.
Rate Movements Across Key Lanes:
While some lanes show an uptick, the overall market lacks dramatic fluctuations.
Europe to North America (FAX): Rates have risen 17% in the past fortnight to $1.98, but the return journey remains broadly flat at around $1.04.
South-east Asia to North America: After peaking at $5.70 in early October, rates dipped but have been gradually rising again, currently standing at $5.14.
Greater China to North America: This lane has seen a more significant increase, rising 47% from its year-low of $4.05 in early October to $5.95 currently, though it has been characterized by peaks and troughs throughout the year. The reverse leg has seen rates drop from $1.53 to $1.38 in the past week.
South-east Asia to Europe: Rates are trending upwards, now at $3.78.
Greater China to Europe: Rates peaked on October 3 at $4.51 but have since fallen back to $4.11.
The general consensus among forwarders is that while there's some activity, it's not indicative of a widespread peak season. "There is no option to do a peak season surcharge this time around; there’s not lots of volumes coming in," the European forwarder concluded, expressing a sentiment of uncertainty regarding the Q4 market.
