FIFI: Airfreight rates surge in December

A combination of accelerating global trade growth, route cancellations and inclement weather caused air cargo rates to grow in the double-digit range week-over-week in December, according to the most recent Freightos International Freight Index (FIFI).    Airfreight rates surged in December due to a combination of accelerating global trade growth, route cancellations, intermittent bad weather and increasing backlogs, according to the most recent Freightos International Freight Index (FIFI).
   The International Air Transport Association (IATA) said early last month that air cargo demand had grown 9.3 percent so far for the year in 2017.
   According to the FIFI, China-U.S. West Coast rates increased 11 percent week-over-week for the week leading up to the Christmas holiday (week 51), but were still 29 percent behind last year’s rates. China-U.S. East Coast rates also increased 15 percent during the same period, but were still 25 percent behind last year’s rates.
   Freightos noted that the 7 percent rise in China-Europe rates in December is still catching up on last year’s rates, while Europe-U.S. East Coast rates are under last year’s rates by 28 percent.
   “Of course, urgent shipments are going for a lot higher. Last week, we saw Hong Kong to Europe going for $21/kg, and Europe to South America at $26/kg,” said Manel Galindo, CEO of Freightos WebCargo. “China-Europe rates will stay high. Even where there is some flexibility, rates will stay in the $7-10/kg band for several more weeks yet. The current backlog probably won’t fully clear before the lead up to the Chinese New Year closedown starts.”
   Freightos said that ocean rates are rising too, with China-U.S. West Coast rates increasing 11 percent week-over-week for the same time period in December.
   “Carriers will be hoping this continues to hold, and upcoming GRIs have an effect, because, with the exception of China-Europe, rates remain well down on last year,” said Freightos.