Global air cargo rates kept falling through the final days of June and the start of July, as reduced fuel expenses and weaker demand put pressure on the market, even though fresh tensions in the Middle East have heightened the possibility of new supply chain interruptions, according to WorldACD Market Data.
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The worldwide average air cargo rate decreased by 1% compared to the prior week, reaching $3.13 per kilogram for the seven days ending July 5, after a 2% drop the week before. Average spot rates slipped 2% to $3.62 per kilogram, with decreases observed across every major region, including Europe, North America, Asia Pacific, and Central and South America, the weekly report stated.
Despite the weekly reduction, global spot rates were still 37% higher than the same period a year earlier, driven by increases from the Middle East and South Asia and North America, where rates climbed 46%, followed by Africa at 42% and Asia Pacific at 37%, it added.
WorldACD Market Data noted that global air cargo volumes fell 2% during the week, after a 1% decline the previous week, largely due to lower activity surrounding the US Independence Day holiday on July 4. North America saw the largest weekly drop in cargo volumes, down 10%, while Central and South America decreased 7%.
On a year-over-year basis, however, worldwide chargeable weight remained 4% higher, buoyed by an 8% rise in shipments originating from Asia Pacific.
Traffic from Hong Kong to Europe dropped sharply after new European Union customs regulations came into force on July 1, eliminating the de minimis duty exemption for imports valued under EUR150. Cargo volumes on that route fell 12% week-over-week, following declines in the prior two weeks, returning to levels last observed at the end of March.
In contrast, shipments from China to Europe remained largely steady after a 6% drop the previous week. Overall cargo volumes from Asia Pacific to Europe decreased 2% during the week, while spot rates on that route softened to $5.09 per kilogram.
WorldACD said that renewed hostilities involving the United States and Iran could heighten disruptions to air cargo markets and freight rates in the coming days and weeks, despite the recent easing in prices.
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