Air cargo tonnages declined steeply last week from Asia Pacific, and specifically from China and Hong Kong to the US, ahead of the changes to US 'de minimis' rules on May 2, with May 1 'Labor Day' holidays and Japan's 'Golden Week' holidays also contributing significantly to week-on-week (WoW) declines in worldwide flown cargo.

According to the latest figures from WorldACD Market Data, worldwide air cargo tonnages dropped by 3%, WoW, in week 18 (April 28 to May 4).

Cargo from Asia Pacific origins recorded by far the biggest WoW decrease of 11%, with Central & South America (CSA) origin cargo recording a 3% drop, after spiking in recent weeks due to high Mother's Day flower shipment volumes.

Cargo from Africa, and from Middle East & South Asia (MESA) was flat, WoW, with a small increase from North America (+1%), and a +7% rise from Europe origins, related to post-Easter recovery.

[Source: WorldACD]

Worldwide, average rates of US$2.40 per kilo were broadly in line with the level of the previous two weeks, based on a full market average of spot rates and contract rates.

The air cargo market data provider noted that average rates from Asia Pacific increased by 3%, WoW, but this was mainly the result of a 'mix effect' – a steep drop (drop of 26%) in (lower-yield) intra-Asia Pacific volumes and a smaller decrease in volumes of other origin Asia Pacific flows (drop of 12%) at relatively high average rates (raising the proportion of higher-yield cargo).

In fact, average rates for origin Asia Pacific flows, excluding intra-Asia Pacific volumes, decreased by 1%.

Spot rates in week 18 averaging US$2.56 per kilo worldwide were also flat, WoW, with increases from CSA (up 11%, WoW), North America (up 6%), and MESA (up 1%) cancelled out by falls in spot rates from Asia Pacific (decline of 3%), Europe (decrease of 3%), and Africa (drop of 2%, WoW).

'De minimis' changes

"The ending on May 2 of 'de minimis' import reporting and fee exemptions for goods from China and Hong Kong to the US looks set to have a very big impact on air cargo markets, with several reports indicating that dozens of weekly transpacific freighter services have been cancelled or suspended or shifted to other markets such as the transatlantic," WorldACD said.

"But the full effects are likely to become clearer in the figures for week 19, when a full week of post- 'de minimis' figures are available," it added.

Calculations by WorldACD, based on the more than 500,000 weekly transactions covered by WorldACD's data, suggest that over 95% of the WoW worldwide air cargo tonnage declines in week 18 may be due to the combined effects of 'Labor Day' holidays (responsible for around 80% of the drop) and Japan's 'Golden Week' holidays – where a 45% WoW drop in tonnages ex-Japan alone contributed a further 17% to the worldwide WoW tonnage decline.

China-US vs China-Europe comparison

Meanwhile, if comparing the falls in flown chargeable weight in week 18 from Asia Pacific to the US (decrease of 10%, WoW) and China to the US (decrease of 14%, WoW) with those from Asia Pacific to Europe (decrease of 4%, WoW), and China to Europe (decrease of 3%, WoW), there seems to be a big difference in the relative performances of those markets, WorldACD said.

"This suggests that the changes in the China-US (de minimis) rules are already having a significant effect," the air cargo data provider added.

On the pricing side, average weekly spot rates from China to the US have been somewhat volatile in the last two months, ranging between US$3.34 and US$4.99 per kilo.

The analysis noted that the rates fell in week 18, WoW, for the fourth consecutive week, dropping a further 9% to US$3.85 per kilo.

But to Europe, spot rates from China have been more stable in the last two months, ranging between US$3.87 per kilo and US$4.29 per kilo, dipping by 4% in week 18 to US$3.97 per kilo.