Drewry Air Freight Index – Fall continues in June

   Air cargo pricing on the East-West trade lane in June fell to its lowest level since May 2012, according to Drewry’s East-West Air Freight Price Index. Pricing finished the month at $3.06 per kilogram.
   Drewry’s index collects air freight buy rates on 21 major trade lanes and averages them together, coming up with a weighted index and an average price for a kilogram of cargo. The rates collected are those paid by forwarders to carriers. The weighted average includes any security and fuel surcharges along with the base rate. 
   A number of issues affected rates last month. June began the high season for passenger travel, which pushed air cargo load factors down, Drewry said, and pricing out of Asia into North America and Europe fell as well. This fall was enhanced by lowering fuel surcharges. As of July 12, the price of jet fuel had dropped by 4.6 percent, month over month, and had decreased by 4.5 percent when compared to the same period last year, according to the International Air Transport Association.
   Overall, pricing has been on somewhat of a roller coaster since the beginning of the year. After starting at $3.25 in January, rates went up, then down, then up again for the next three months. In May, a slow decline started that continued into June, and now the price of a kilogram of airfreight is a far cry from the $3.60 per kilogram forwarders paid carriers in December 2012.
   Analysts predict pricing will remain low until the end of the summer. This fall, carriers will lower capacity, pushing rates up again. – Jon Ross