Air freight rates were little changed in July, with the global Baltic Air Freight Index (BAI00), calculated by TAC Data, edging up +1.5% over the four weeks to 4 August. That left it marginally lower by -1.8% over the past 12 months.

The relatively muted movement in rates was not unusual for a period when air cargo often enters its ‘low season’. Typically, extra capacity gets added in the bellyhold of passenger planes at this time of year, with more planes flying as people take summer holidays, particularly on Transatlantic routes. This extra capacity tends to help keep overall rates down.

The extreme uncertainties at the start of this year – on the outlook for tariffs and trade – have clearly abated to a significant extent. Nevertheless, sources were still reporting an ongoing reshuffling of supply chains by shippers and capacity by carriers between different lanes.

Shippers, sources said, were trying to anticipate upcoming changes to trade terms, such as the removal of the de minimis exemption for packages entering the US from all countries that is due to take effect from 29 August. There was, therefore, also considerable variation in price patterns through July between different lanes and outbound locations. That said, on traditionally the busiest lanes in the market from China to the US and to Europe, there was relatively little movement in rates. The new BAI Spot rates from Hong Kong – which went from private to public trials at the start of July – were barely changed over the month.

Shippers, sources said, were trying to anticipate upcoming changes to trade terms, such as the removal of the de minimis exemption for packages entering the US from all countries that is due to take effect from 29 August. There was, therefore, also considerable variation in price patterns through July between different lanes and outbound locations. That said, on traditionally the busiest lanes in the market from China to the US and to Europe, there was relatively little movement in rates. The new BAI Spot rates from Hong Kong – which went from private to public trials at the start of July – were barely changed over the month.

BAI Spot rates from Hong Kong to Europe fell from HK$33.88 per kilo on June 30 to HK$32.62 on July 31. To the US East Coast, they edged up from HK$36.38 to HK$37.34, while US West Coast rates hardly moved, starting July at HK$35.81 and ending at HK$35.46.

The overall index of outbound routes from Hong Kong (BAI30) – reflecting average rates achieved across the full spectrum of spot and forward contract cargo – was also little changed over the four weeks to 4 August, dipping by -0.1% month-on-month (MoM) to leave it lower by -8.2% year-on-year (YoY).

Outbound Shanghai (BAI80) was up by +0.1% MoM to leave it lower by only -3.2% YoY.

Some sources suggested the relative strength in these rates reflected some shippers moving cargo more quickly before the end of de minimis – and the continuing risk of much higher tariffs between the US and China. Others, however, suggested China's rates were also being buoyed up to some extent by a reduction in capacity and movement of planes to other lanes such as from Vietnam, Thailand and Malaysia.

Some sources suggested the relative strength in these rates reflected some shippers moving cargo more quickly before the end of de minimis – and the continuing risk of much higher tariffs between the US and China. Others, however, suggested China's rates were also being buoyed up to some extent by a reduction in capacity and movement of planes to other lanes such as from Vietnam, Thailand and Malaysia.

The tracking of changes in capacity has been made much more accurate through a new version of the TAC Space capacity-tracking tool, which is now available and helping to more easily identify changes as they occur day by day on multi-leg routes. It is already being used by various major shippers, particularly for TransPacific lanes.

Meanwhile, the popularity of the new BAI Spot methodology to track changes in the marginal price is already spreading to other locations, with private trials now underway from both India and South Korea, and demand developing for other lanes too.

Out of Europe and North America, rate patterns were also relatively strong through the month. The index of outbound routes from Frankfurt (BAI20) slipped a bit but only marginally by -1.2% MoM, with gains on Transatlantic lanes offsetting falls to other locations, leaving it still ahead by +4.9% YoY.

After some big gains in the previous month or so, outbound London (BAI40) was volatile intra-month but ended the four weeks to 4 August with a rise of +2.8% MoM, leaving it well ahead by +28.3% YoY.

From the US, the index of outbound routes from Chicago (BAI50) was also up by an eye-catching +18.7% MoM, recovering losses from earlier in the year to propel it back into positive territory by +10.2% YoY.

From a global macro perspective, equity markets continued to rise gently in July in a relatively serene fashion as the elevated political uncertainty of the first half of 2025 continued to abate.

That happened despite renewed threats from US President Donald Trump to impose swingeing tariffs on various trade partners, albeit not so high as in his ‘Liberation Day’ announcement earlier this year.

The broad-based S&P500 index had ended July back firmly in positive territory for the year-to-date – and at roughly +17% over 12 months. After a brief wobble at the start of August, it seems the market was now largely discounting the likely impact of that.

The recovery in US equity markets has been driven by a resurgence in tech themes led by AI. Leading US stocks in the AI field such as Nvidia, AMD and Microsoft had been hit earlier in the year by the revelation of potentially challenging cut-price competition from Deepseek in China. However, they have all recovered strongly since the start of May and continued to rise to new heights through June and July.

Nevertheless, the strongest performing major global equity market this year remains the DAX index, which was still up around +30% YoY at the end of July as the market anticipates faster growth in Germany boosted by major new spending on defence and infrastructure.

All of this has been further helped by the agreement on tariffs announced between the EU and US, with a rate of 15% being applied to European goods being seen as not so great but not so damaging as it might have been. Crucially, it was far from a worst-case scenario.

Tariff rates of 30% or more into the US are still being threatened against many other economies from Switzerland to South Africa.

Despite this, Transatlantic air cargo markets rates have thus far remained relatively strong, although still a long way below the levels of peak season last winter.

Neil Wilson, TAC Editor

Neil Wilson is Editor of TAC Index, which provides independent, accurate and actionable global air freight data, allowing our customers to make comparative, cost-effective and intelligent air freight decisions.

Neil has more than 30 years’ experience in financial journalism and publishing, specialising mainly in derivatives and alternative investments. He has contributed to various publications including The Financial Times, The Economist and Risk magazine. He has also been a guest speaker at many industry events.

Neil has a B.A. with Honours in Philosophy, Politics and Economics from the University of Oxford.

 

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