In October, the air freight sector continued to reverse 18 months of record increases as the global economy slowed and consumers tightened their budgets. There are no indications of improving cargo traffic even as the industry is well into its annual peak season. Both demand and rates are declining at a time when they would typically be rising.

Volumes in October declined 8% compared to last year, marking the eighth month of demand decline. The negative trend intensified after September when volume decreased by 5% annually and 0.3% compared to three years before.

The capacity recovery also ceased. Available belly and freighter space are 7% below pre-pandemic levels, which is why rates remain high. The increased airlift resulting from the reintroduction of more passenger flights during the summer, coupled with a decrease in demand, has made planes less full and more profitable. The volumetric load factors in October were 61%, seven percentage points lower than the same month in 2018 and 1 percentage point worse than in 2019.

A minor uptick in Asia-Pacific export routes to Europe and North America during the second half of October was most likely due to a bounceback from China’s Golden Week when manufacturers close and do not ship, rather than a peak season’s late spike.

The Freightos Global Air Index for October reveals an average spot rate of $3.15/kg. International air cargo rates have decreased by two-thirds since December and about 25 percent from last year, but are still almost double the level in 2019 due to the capacity shortage and airline and airport labor shortages that limit flight and warehouse productivity.

Until peak season, prices on the more general Asia-U.S. lane average $2 per kilogram; last year, they rose to $13, compared to $5 last week. The standard pricing between China and the U.S. West Coast is between $2 and $3 per kilogram, whereas the high season rate is approximately $5 per kilogram. Rates for this year, however, is in the $6 area.


The decline in air freight costs is less significant than the decline in ocean freight rates, which have decreased by 70% to 85% over the past year due to a combined effect of a reduction in port congestion and demand. Before the end of the year, spot container rates on the Asia-Europe and transpacific trade lanes are projected to fall below pre-pandemic levels. The steep decrease in spot rates was “unavoidable,” given the exceedingly weak demand.

However, the operational costs of ocean carriers are much higher than they were in 2019, which might send more exposed shipping lines back into the red in the first quarter of 2023.

In the meantime, the spot market indices cannot keep up with the steep discounts on exports from China. For instance, Drewry’s WCI North Europe component fell by a relatively moderate 4% to $3,684 per 40ft this week after plummeting by more than a third since September. This is a loss-making proposition for anyone moving their boxes under a contract.

After the withdrawal of transpacific ad-hoc and newbie services and efforts of the port agencies, container imports at Long Beach and Los Angeles ports have decreased significantly, with the port of Los Angeles’ data registering a 26% decrease in volumes this week compared to the same week last year and a 27% decrease projected for the following week.

The exception for container trades is still transatlantic, where carriers have thus far maintained the significant rate increases gained over the past two years.

This week’s FBX North Europe to U.S. East Coast component increased a little to $7,102 per 40ft, compared to $1,800 in the same period two years ago.


In October, Russia prohibited trucks from EU countries, Norway, Ukraine, and the United Kingdom in response to restrictions imposed by these countries on Russian truckers. The prohibition will remain in effect through December 31. Some types of food, manufactured goods, ingredients, and non-food items are exempt from the restriction.

Despite previous concerns about potential disruptions, trucker bans enforced by Russia and certain European nations have not affected road transit between China and the European continent.

Nonetheless, the restrictions are expected to increase the prices and durations associated with matching European trucks with Russian trucks.

For China-EU freight trains, the closure of road borders to EU trucks should have no bearing on the commodities transported by China-EU freight trains.



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