First signs of recovery in air cargo?

The air cargo market could be showing the first signs of a possible recovery fuelled by the restart of production at Chinese factories.

Data provider TAC Index said that while air cargo rates “continued to edge slightly lower” last week there were indications of the “first shoots of recovery” for some time after recent “steep price falls”.

The company said that while the overall Baltic Air Freight Index last week fell 0.9% compared with a week earlier, prices out of Hong Kong increased by 2.6%.

“After steep falls recently at the lower quintiles of prices being paid, sources say both spot rates and volumes appear to be on the up as production slowly ramps up again in China,” the data provider said.

Forwarder Flexport said that market demand out of North China is low but there was an upward trend going into last weekend and rates have increased compared to the week prior.

However, the company said that demand from most other Asian origins was low.

Meanwhile, rates on key trade lanes for the month of February as a whole continued to decline, although they remain above pre-Covid levels.

Figures from the Baltic Exchange Airfreight Index (BAI) show that average rates – both contract and spot – paid by forwarders on services from Hong Kong to North America in February declined to $4.93 per kg from $6.14 per kg a month earlier and $9.68 per kg a year ago.

However, they remain above the $3.54 per kg being paid in February 2019.

On services from Hong Kong to Europe the average price being paid by forwarders on flights from Hong Kong to Europe fell to $4.40 per kg from $4.96 per kg in January and $5.80 per kg a year earlier.

In February 2019 the average price being paid on the trade stood at $2.52 per kg.