Moving into 2023, we have more risk injected into the airfreight market – however, equally more risk of me repeating myself, many of the core factors that had drained away critical capacity and inspired volatility in primary airfreight feedstocks (especially fuel) have carried over from 2022 into 2023. Even with this ‘peak season’, airfreight was a bit of a damp squib – using the BAI81 Shanghai to Europe route as a benchmark – rates saw a very slight tick up through October (topping out at $6.06/kg on the index) thereafter lagging down through to the date of writing. Realistically, however, there is an awful lot more cash-per-kg flowing into the airfreight market, even with the return of passenger travel. Indeed, passenger travel is priced much higher than pre-pandemic – a result of airlines taking advantage of new travel urgency and a much higher cost base and debt load (again, fuel is a core factor). 

Realistically, however, there is an awful lot more cash-per-kg flowing into the airfreight market, even with the return of passenger travel. Indeed, passenger travel is priced much higher than pre-pandemic – a result of airlines taking advantage of new travel urgency and a much higher cost base and debt load (again, fuel is a core factor). 

Whilst a gradual move down on index prices is very much the theme for Asia outbound, Transatlantic continues its classic side-ways and extremely skippy activities – index prices resembling a Richter scale as a measure of intra-week and intra-month spot volatility on the route despite a relatively consistent moving average. This route is a bit more difficult to gauge – on ocean freight, the Transatlantic routes remain as one of the last bulwarks of the 2021 freight bull market – whilst this could be congestion driven, the notion that the return of passenger travel would put the brakes on airfreight prices has been dispelled. Even with the return of Transatlantic capacity, the renewed focus on air freight as a core revenue stream has been highly supportive despite recessionary and inflationary factors in North America and North Europe. 

About Peter Stallion, Head of Air and Containers, Freight Investor Services

Peter Stallion heads up the Air and Container Freight desks at FFA brokerage Freight Investor Services. He started his career in air freight chartering, and has a passion for emerging risk management markets and the logistics industry.