• Global spot air cargo rates rose in late October, driven mainly by strong demand from Asia Pacific ahead of peak holiday shipping.
• India’s Diwali slowdown temporarily pulled regional tonnages down, but underlying market pressure on capacity remains.
• Asia to US and Europe lanes saw the sharpest rate increases, with China, South Korea, Taiwan, and Vietnam all hitting their highest price levels in months.

Worldwide average spot rates surged in the last full week of October, despite a steep drop in tonnage from India due to Diwali festival holidays, as rates from Asia Pacific origins built ahead of Thanksgiving, Black Friday, and Christmas.

According to the latest weekly figures from WorldACD Market Data, global spot prices in week 43 (20 to 26 October) jumped by an average of 4 percent, week on week (WoW), a similar pattern to that seen in week 43 last year – driven by 5 percent WoW spot rate increases from Asia Pacific, Europe, and North America origins. Spot rates from the Middle East and South Asia fell by 4 percent, WoW, as tonnage flown from that region dropped by 16 percent, WoW. That was chiefly due to a big WoW drop in chargeable weight from India, where tonnage slumped by around 30 percent, WoW, to key markets such as Europe and the United States, because of Diwali holidays.

Those decreases in volumes flown from India contributed to total worldwide tonnage dipping by 2 percent, WoW, in week 43. Analysis by WorldACD, based on the more than 500,000 weekly transactions covered by WorldACD’s data, indicates that excluding the fall in traffic ex-India linked to Diwali would show a 1 percent WoW fall in worldwide tonnage in week 43.

Although that is hardly evidence of a strongly emerging fourth-quarter peak season, the significant rise in spot rates from three major origin regions indicates that there is some rising pressure on capacity from key markets.

Asia Pacific pressure

Examining Asia Pacific origin markets specifically, where capacity pressures traditionally begin building at this time of year, spot rates from Asia Pacific to the United States rose by a further 8 percent, WoW, following a 6 percent rise the previous week, as demand rebuilt following China’s Mid-Autumn Festival and holidays in Taiwan and South Korea and ahead of Thanksgiving in the United States. Spot prices from China to the United States surged by a further 11 percentto US$5.40 per kilo – their highest level this year – after rebounding 18 percent the previous week, and rates from South Korea to the United States recorded a 21 percent WoW increase to US$5.73 per kilo, their highest level since July. Rates from Taiwan to the United States saw a further WoW rise of 5 percent after an increase of 8 percent WoW the week before, and ex-Vietnam prices rose by 6 percent, WoW.

From Asia Pacific to Europe markets, which have been less volatile than tariff-affected Asia Pacific to United Statesmarkets this year, spot rates remained comparatively stable, edging up by an average of 2 percent, WoW, in week 43, to US$4.02 per kilo. China to Europe spot rates continued to slowly build, with a 2 percent WoW rise to US$4.08 per kilo, their highest level since the beginning of June. Ex-South Korea spot prices rebounded with a further 5 percent, WoW, the second consecutive weekly rise following national holidays in early October, and Vietnam to Europe rates rose 5 percent to US$3.69 per kilo, their highest level since February.