August Air Cargo Market: Rates in a Lull Ahead of a Peak Season Tipped to Shift Away from China

Air freight rates on major trade lanes originating from Hong Kong this past August continued to reflect the summer lull, ahead of an expected pickup for the year-end peak season.

The latest figures from the Baltic Exchange Airfreight Index (BAI), which uses data from the TAC Index based on both spot and contract prices, show:

•    Rates from Hong Kong to North America edged up slightly in August, rising to $5.29/kg from $5.11/kg in July.
•    Rates from Hong Kong to Europe, however, saw a slight decrease in August, standing at $4.26/kg compared to last month's $4.39/kg.

Compared to the same period last year, rates on both routes were down. Specifically, the rate from Hong Kong to North America in August fell by 11.2%, while the route to Europe was down 3.8%. This decline reflects weaker demand levels and lower jet fuel prices compared to 2024.

In its market update at the end of August, the TAC Index said that rates globally had been flat during the month due to the quiet summer period.

TAC stated: “Despite reports of continuing high demand in certain sectors ranging from garments and pharma to electronics and semiconductors as well as capacity constraints causing delays in certain markets, overall rates were still flat to down as the traditionally quieter summer ‘low season’ continued.”

Peak Season Outlook: A Shift in Trade Flows

Looking ahead to the upcoming peak season, freight forwarder Dimerco forecasts a shift in cargo volumes on the Transpacific away from China, as companies adjust their supply chains in response to Washington's tariff measures.

Dimerco noted: “The traditional peak season for airfreight begins in September, with stronger export flows anticipated from Southeast Asia, particularly Vietnam, Thailand, and Malaysia, into the US, surpassing volumes from China. Airlines are already preparing additional capacity to meet this growth, driven largely by AI servers, consumer electronics, and other high-tech products on Transpacific Eastbound (TPEB) routes.”

Dimerco added that while total U.S. import volumes are expected to decrease by 5% this year, air freight may perform better, as companies tend to opt for front-loading to avoid potential tariff hikes.

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Source: Phaata.com (According to Freight Waves)

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