A sharp rise in air cargo spot rates from Europe origins, particularly to the Americas, has helped to further drive up average worldwide spot prices in the second full week of November, with rates to Brazil rising especially rapidly in the last two weeks, linked to congestion problems at São Paulo’s Guarulhos International Airport (GRU).

According to the latest weekly figures and analysis by WorldACD Market Data, average spot rates from Europe origins rose by a further +10 percent in week 46 (11 to 17 November), week on week (WoW), to US$2.71 per kilo. That’s +23 percent higher than this time last year. Average spot rates ex-Asia Pacific were flat in week 46 compared with the previous week at US$4.39 a kilo, although a +3 percent increase in tonnages ex-Asia Pacific also contributed to a +4 percent WoW rise in average worldwide spot rates to US$3.14 per kilo. There were modest WoW spot rate increases

Buoyant transatlantic market

However, the biggest shifts in the last few weeks have been on the westbound transatlantic market, particularly from Europe to the USA and to South America. Europe to the USA spot rates recorded consecutive WoW increases of +16 percent and +17 percent in weeks 45 and 46, taking them to US$3.34 per kilo – a rise of +48 percent in five weeks and +36 percent in only two weeks. That reflects a fall in capacity following the start of airlines’ winter schedules from 27 October, and some demand increases ahead of the Thanksgiving holiday on 28 November – but also the fact that cargo load factors on the westbound transatlantic market were already relatively high.

Meanwhile, average spot rates from Europe to South America have leapt from US$4.32 per kilo in week 44 to US$5.88 in week 46 – a rise of +36 percent. By far the biggest increases have been to Brazil, where high levels of congestion at GRU, and even a 5-day cargo embargo to 11 November, have caused Europe to Brazil spot rates to jump from $4.19 per kilo in week 44 to US$6.58 in week 46 – a rise of +57 percent.

Strong but stable Asia Pacific markets

Although markets remain relatively strong, including ex-Asia Pacific, good advance planning by air cargo stakeholders looks set to avert a major peak season capacity crunch and very steep rate rises from Asia Pacific markets. Nevertheless, spot prices to Europe from China, Hong Kong, and South Korea all recorded WoW rises in week 46, of +11 percent, +5 percent, and +4 percent, respectively, to US$4.98, US$5.93, and US$4.93 per kilo. But spot rates from Asia Pacific to the USA dipped by -4 percent percent, WoW, including a -2 percent drop from China.

Based on the more than 450,000 weekly transactions covered by WorldACD’s data, worldwide average spot prices are +25 percent above last year’s levels (YoY), with Middle East & South Asia still highly elevated (+73 percent), and spot rates ex-Asia Pacific up +22 percent.

Based on a full-market average of spot and contract rates, overall worldwide rates were up +2 percent, WoW, and +11 percent higher, YoY.