Early planning of the cause of the rate hike in September
Air freight rates on major east-west trade routes in September rose at a faster rate than last year as companies sought to avoid a peak season tightening.
The latest data from the Baltic Exchange Airfreight Index shows that in September, prices from Hong Kong to North America rose 12.7% from the previous month to $ 9.74 per kg.
Last year, the rates on the trade route between the two months declined slightly, while in 2019 they increased slightly.
On Hong Kong to Europe, rates rose 20.3% in September from August to $ 5.57 per kg. In 2020 there was a slight increase and in 2019 the rates remained stable between the two months.
Senior analyst at investment bank Stifel Bruce Chan said in the Baltic Exchange market update that the increases may be advance planning on the part of shippers and freight forwarders.
“The reason for the earlier recovery, in our opinion, is that retailers were caught off guard for last year’s peak by high demand and limited capacity,” he said.
“This year, many are preparing for the holidays earlier, while trying to deal with a serious and persistent supply chain disruption. Walmart, for example, claimed to build up as much inventory as possible at the end of the third quarter.
“We believe that part of this strategy involves relying on suppliers to produce and supply the goods, but also working to secure as much transport capacity as possible by leveraging scale, creativity and pure silver. “
He added that the continued growth of e-commerce could also lead to increased demand.
Chan said rates from Shanghai to North America and Europe increased further. PVG’s prices to North America were up 40% from August and prices to Europe were up 38%.
Peter Stallion of derivatives broker Freight Investor Services said modal shift may have played a role.
“It is possible that the price of air freight was strongly supported by ocean-to-air conversions, as congestion on the west coast of the United States surpassed its previous record in August and September. However, that started to decrease before Golden Week, ”he said.
In fact, prices fell on both lines during the first week of October.
There was a similar trend on services from Frankfurt to North America, with prices dropping from $ 3.94 per kg in August to $ 4.21 per kg in September. Last year, prices between the two months fell.