The ceasefire between Iran and the US in the Middle East failed to reverse the air cargo rate increases registered earlier in the year.
Figures from the global Baltic Air Freight Index, calculated by TAC Index, show that in April the average airfreight rate was up 32.7% year on year, with the gap on last year increasing to 37.2% by the end of the month.
TAC Index said that rates surged in March after the US and Israel launched air attacks on Iran, and Iran responded with missiles and drones across the region.
Meanwhile, the closure of the Strait of Hormuz to ocean shipping traffic pushed up oil prices and, therefore the cost of jet fuel.
A ceasefire agreement has been in place since 8 April but the Strait of Hormuz remains closed.
“By April, the market had adjusted to some extent, with shippers finding various alternative routes to move products and some capacity through the Middle East resuming operations,” said Neil Wilson, editor of TAC Index.
He added: “After the ceasefire was announced, it seems the air cargo market entered ‘wait and see’ mode, with rates remaining elevated and effects continuing to ripple out more broadly across the globe, but the pace of rate increases dropping or rates even falling back a little on some of the most impacted lanes.”
According to TAC data, the average rate – based on both spot and contract – on services from Hong Kong to North America climbed 29.5% year on year in April to $6.94 per kg.
From Asia to Europe, rates were up 26.7% year on year during the month to $5.79 per kg, while Frankfurt to North America increased 12.9% to $2.81 per kg.
Contacts suggest that in the first days of May, rates from Hong Kong to North America had started to decline, while they had plateaued between Hong Kong and Europe.
“By month-end, however, the overall rate of increases was dropping and rates to Europe even falling back slightly according to TAC data on many other busy outbound routes from Asia – including from Vietnam, Bangkok, Seoul and Taiwan,” Wilson said.
He added: “A swift resolution to the conflict in the Middle East could perhaps point the market back on a path towards more normal conditions.
“But given the current state of disruption to jet fuel supplies, it seems unlikely rates will fall back sharply any time soon.”
