In February, the prices of major freight routes in Hong Kong remained firm
Despite concerns about the impact of tariffs, air freight rates for major Hong Kong routes in February remained higher than last year's levels.
The latest data from the Baltic Exchange Airfreight Index, based on TAC data, shows that the average freight cost (including spot and contract) from Hong Kong to North America has increased by 15.2% year-on-year to $5.37 per kilogram.
Compared to the record of $5.60 per kilogram in January, the price has decreased slightly, but it is not uncommon to see a month on month decline at this time of year, depending on the timing of the Asian Lunar New Year holiday, as many factories in Asian countries close.
This year, most of the peaks before New York will occur in January, while in 2024, due to the later holiday season, more peaks will occur in February.
According to contacts, the spot exchange rate from Hong Kong to North America fell in mid February and then rebounded towards the end of this month, indicating that the market is rebounding after the decline in the New York stock market.
Despite the United States imposing a 10% tariff on goods from China and suspending minimum exemptions for Chinese goods within a few days, the exchange rate remains strong.
Analysts say it is currently difficult to distinguish the impact of tariffs from the impact of LNY, and how these two developments will affect the market.
In a market analysis report in mid month, TAC stated, "The relatively firm tone of the market has confused some people, namely concerns about rising tariffs and concerns that the 'minimum' exemption for small packages entering the United States may be cancelled, which could severely impact quantity and prices, as there have been reports that some e-commerce flights have been cancelled
"So far, in the period after the Chinese Spring Festival, the reported rate has not reflected such a dramatic situation, at least not yet."
According to WorldACD data, demand in the Asia Pacific region has continued to rebound to pre Lunar New Year levels in recent weeks.
WorldACD stated, "In the 8th week (February 17-23), the chargeable weight of origin in the Asia Pacific region has rebounded by another 6%, approaching the level of mid January
The analyst said that the demand for the United States and Europe in the Asia Pacific region has increased by 5%. Hong Kong and Japan's demand for the United States has grown by double digits (11%), while demand from China has increased by 2%.
For Europe, demand from China increased by 5%, but demand from Hong Kong remained flat.
Meanwhile, TAC's data shows that the average price from Hong Kong to Europe is 4.5% higher than last year, at $4.37 per kilogram. The price of this transaction is also lower than the level in January, when the average price was $4.68 per kilogram, reflecting the impact of the New York holiday.
Last year, due to the Red Sea crisis, container ships diverted near Cape of Good Hope, which also pushed up the rates of this trade. Although ships are still navigating longer African routes, the situation has stabilized compared to the same period last year.
Drift on both sides of the Atlantic
The airfare prices from Europe to North America also continue to be higher than last year's levels. The latest TAC data shows that the shipping cost from Frankfurt to North America has increased by 26.2% compared to last year, reaching $2.60 per kilogram.
The price of this trade route often increases in winter as passenger airlines withdraw tonnage from the market to reflect the off-season for tourism.