Global air cargo rates extended their decline at the end of June and early July as lower fuel prices and softer demand weighed on the market, although renewed tensions in the Middle East have raised the risk of fresh supply chain disruption, according to WorldACD Market Data.
Worldwide average air cargo rates fell 1% week-on-week to $3.13 per kg in the week ended July 5, after declining 2% the previous week. Average spot rates dropped 2% to $3.62 per kg, with declines recorded across all major regions, including Europe, North America, Asia Pacific and Central and South America, it stated in the weekly report.
Despite the weekly decline, global spot rates remained 37% higher than a year earlier, led by gains from the Middle East and South Asia and North America, where rates were up 46%, followed by Africa at 42% and Asia Pacific at 37%, it added.
WorldACD Market Data said global air cargo volumes fell 2% during the week, following a 1% decline the previous week, largely reflecting reduced activity around the US Independence Day holiday on July 4. North America recorded the steepest weekly decline in cargo volumes, down 10%, while Central and South America fell 7%.
On an annual basis, however, worldwide chargeable weight remained 4% higher, supported by an 8% increase in shipments originating from Asia Pacific.
Traffic from Hong Kong to Europe fell sharply after new European Union customs rules took effect on July 1, ending the "de minimis" duty exemption for imports valued below €150 ($176).
Cargo volumes on the route dropped 12% week-on-week, following declines in the previous two weeks, returning to levels last seen at the end of March.
By contrast, shipments from China to Europe were broadly unchanged after falling 6% the previous week. Overall cargo volumes from Asia Pacific to Europe declined 2% during the week, while spot rates on the route eased to $5.09 per kg.
WorldACD said renewed fighting involving the United States and Iran could increase disruption to air cargo markets and freight rates in the coming days and weeks, despite the recent easing in prices.
