Airfreight tonnages declined steeply last week from Asia Pacific—specifically from China and Hong Kong to the USA—ahead of the changes to US ‘de minimis’ rules on 2 May. The 1 May ‘Labour Day’ holidays and Japan’s ‘Golden Week’ celebrations also contributed significantly to week-on-week (WoW) declines in worldwide flown cargo.

According to the latest figures from WorldACD Market Data, worldwide airfreight tonnages dropped by 3 percent WoW in week 18 (28 April to 4 May). Cargo from Asia Pacific origins recorded by far the biggest WoW decrease, at 11 percent, with Central and South America (CSA) origin cargo falling by 3 percent after spiking in recent weeks due to high volumes of Mother’s Day flower shipments. Cargo from Africa and from the Middle East and South Asia (MESA) remained flat WoW, with a small increase from North America (up 1 percent) and a 7 percent rise from European origins, attributed to a post-Easter recovery.

Globally, average rates of US$2.40 per kilo remained broadly in line with the levels of the previous two weeks, based on a market-wide average including both spot and contract rates. Average rates from Asia Pacific increased by 3 percent WoW, but this was mainly the result of a ‘mix effect’—a steep drop (26 percent) in lower-yield intra-Asia Pacific volumes and a smaller decrease (12 percent) in other Asia Pacific flows at relatively high average rates, which increased the proportion of higher-yield cargo. In fact, average rates for Asia Pacific-origin flows, excluding intra-Asia Pacific volumes, actually decreased by 1 percent.

Spot rates in week 18 averaged US$2.56 per kilo globally and remained flat WoW, with increases from CSA (up 11 percent WoW), North America (up 6 percent), and MESA (up 1 percent), offset by declines in spot rates from Asia Pacific (down 3 percent), Europe (down 3 percent), and Africa (down 2 percent WoW).

‘De minimis’ changes

The ending on 2 May of ‘de minimis’ import reporting and fee exemptions for goods from China and Hong Kong to the USA looks set to have a significant impact on airfreight markets. Several reports indicate that dozens of weekly transpacific freighter services have been cancelled, suspended, or shifted to other markets such as the transatlantic. However, the full effects are likely to become clearer in the figures for week 19, when a full week of post-‘de minimis’ data becomes available.

Calculations by WorldACD—based on more than 500,000 weekly transactions covered by its dataset—suggest that over 95 percent of the WoW global airfreight tonnage decline in week 18 may be attributed to the combined effects of the 1 May ‘Labour Day’ holidays (accounting for around 80 percent of the drop) and Japan’s ‘Golden Week’ holidays. A 45 percent WoW drop in tonnage from Japan alone contributed a further 17 percent to the global decline.

China–US vs China–Europe comparison

Comparing the drops in flown chargeable weight in week 18 from Asia Pacific to the USA (down 10 percent WoW) and from China to the USA (down 14 percent WoW) with those from Asia Pacific to Europe (down 4 percent WoW), and China to Europe (down 3 percent WoW), highlights a marked difference in performance between these markets. This disparity strongly suggests that the changes to the US ‘de minimis’ rules are already having a notable effect.

Spot rate volatility

On the pricing side, average weekly spot rates from China to the USA have been somewhat volatile over the past two months, ranging between US$3.34 and US$4.99 per kilo. In week 18, they fell for the fourth consecutive week, dropping a further 9 percent to US$3.85 per kilo. In contrast, spot rates from China to Europe have been more stable over the same period, ranging between US$3.87 and US$4.29 per kilo. These dipped by 4 percent in week 18 to US$3.97 per kilo.