Worldwide air cargo rates have continued to rise into the first week of April, boosted by a surge in prices and demand from Middle East & South Asia origins, according to the latest weekly figures and analysis from WorldACD Market Data.

This is despite a fall in tonnages from most regions linked to various holiday periods around the world, including Easter, Ramadan, and China's Qingming Festival. 

The air cargo market data provider said average global rates rose more than 2% week-on-week (WoW) in the week of April 1-7 to US$2.54 per kilo, following consecutive weekly WoW rises of between 2% and 3% last month.

WorldACD said this took them to just 1% lower than their level in the same week last year and significantly above pre-COVID levels (+41% compared to April 2019).

 [Source: WorldACD]

Surging MESA-Europe spot rates

"A Close examination this week by WorldACD reveals a big surge in spot rates from the Middle East and South Asia (MESA) to Europe in recent weeks, especially from India and Bangladesh, linked to strong demand developments combined with supply issues caused by disruptions to container shipping and Ramadan," WorldACD said.

It added that according to the latest weekly figures and analysis from WorldACD, MESA to Europe spot rates have soared in the last three weeks to around double their level this time last year, rising to US$3.43 a kilo in week 14 (+109%).

WorldACD said figures for India and Bangladesh origin points are "even more dramatic," with India-Europe spot rates rising to more than US$4 a kilo in week 14 (US$4.13/kg, +160%) and Bangladesh-Europe spot rates soaring to US$4.59 a kilo in week 14 — a "near-trebling" of their level this time last year (+179%). 

"Alongside continuing rate rises from Asia Pacific and MESA origin points, boosted by strong demand from cross-border e-commerce and because of the ongoing disruptions to container shipping in the Red Sea, another factor beginning to have an impact on rates is increasing jet fuel prices," the report said.

Year-on-year comparisons

Compared with last year, average worldwide rates in weeks 13 and 14 combined were down by 4%, with the small increase in chargeable weight (+11% failing to keep pace with the +7% year-on-year (YoY) growth in capacity.

 [Source: WorldACD]

WorldACD said MESA was the only origin region to record a YoY increase in rates (+39%, based on a mix of contract rates and spot rates) and the only origin region where growth in demand (+11%) outstripped increases in capacity (+6%), in a market still strongly affected by the disruptions to container shipping in the Red Sea.

Meanwhile, rates ex-Asia Pacific have now recovered to their level this time last year, thanks to a +8% increase in tonnages and despite a corresponding +13% recovery in capacity.

WorldACD said elsewhere, rates fell YoY, ex-Africa (-3%), Central & South America (-6%), ex-North America (-18%), and ex-Europe (-22%), as all of those origin regions except Africa (+10%) recorded YoY declines in tonnages of between -5% and -7%.

"As noted last week, the consistent recovery in global rates in the last 5 or 6 weeks means that average rates have recovered to close to their peak levels in the fourth quarter (Q4) of last year and are now slightly above their average level in Q4 of $2.47 per kilo," the report said.

Dubai-Europe demand still booming

WorldACD has once again examined certain key hub airports in the Middle East and Asia that have seen particularly strong demand this year due to the disruptions to container shipping in the Red Sea, particularly those commonly used as Asia-Europe sea-air hubs or road-air hubs, including Dubai, Colombo and Bangkok.

It said that Dubai-Europe tonnages were still massively elevated (+114%) in week 14 compared with the same week last year, with tonnages in week 14 very close to their peak levels recorded in week 8. 

Bangkok-Europe tonnages are also still up significantly (+33%) compared with last year, boosted by road-air volumes trucked down from Vietnam and other origin points in Southeast Asia, where the disruptions to Asia-Europe container shipping have also impacted ocean freight traffic and supply chains.

But Colombo-Europe tonnages have fallen back significantly from their exceptionally high levels in weeks 6, 7 and 8, with demand in week 14 even slightly below (-2%) the same week last year, WorldACD said.

Meanwhile, average air cargo rates to Europe from all three of those origins were up significantly YoY, with Colombo up +39%, Dubai up +22% and Bangkok up +20%.