During a period of high volatility and turmoil in markets, global air freight rates trended a little lower in April, albeit with huge dispersion in the trends across different lanes.

The global Baltic Air Freight Index (BAI00) calculated by TAC Data slipped -4.1% over the four weeks to 28 April, leaving it still narrowly ahead by +0.8% year-on-year (YoY).

The overall level of rates was still relatively strong compared with 12 months earlier when rates were unusually high entering the summer season, and rising further as a result of a boom in e-commerce cargo.

Rate levels at or slightly above 12 months ago also continue to compare favourably with the continuing weakness in jet fuel prices. Jet fuel was about -14.6% lower on average YoY to 25 April, according to the latest data from Platts. That should mean most carriers are still enjoying higher profit margins, at least for now.

On the other hand, market sources were reporting spot rates falling much more than the index averages during April – and ending the month flat-to-down in the last couple of weeks of April on the busiest lanes out of China to the US and to Europe.

The index of outbound routes from Hong Kong (BAI30) – still the biggest airport in the world by cargo volume – dropped -3.1% over the four weeks to 28 April, dragging it into negative territory by -3.6% YoY. The index of outbound routes for Shanghai (BAI80) also fell by -3.5% month-on-month (MoM) to leave it at -4.8% YoY.

The index of outbound routes from Hong Kong (BAI30) – still the biggest airport in the world by cargo volume – dropped -3.1% over the four weeks to 28 April, dragging it into negative territory by -3.6% YoY. The index of outbound routes for Shanghai (BAI80) also fell by -3.5% month-on-month (MoM) to leave it at -4.8% YoY.

After starting the year strongly during Q1, rates out of Europe had a much weaker month in April, although overall rates on Transatlantic lanes to the United States still remained well up YoY.

The index of outbound routes from Frankfurt (BAI20) dropped -21.8% MoM,  although it remains in positive territory by +7.9% YoY.

Outbound London Heathrow (BAI40) dropped a similar amount – by -20.9% MoM – but was left languishing at -13.2% YoY, back below even its weakest levels of 2024.

By contrast, rates out of the US ended the month strongly, bucking the downward global trend. April’s levels were comfortably higher YoY, not only to Europe and South America but also to China, despite a sharp fall towards month-end. The index of outbound routes from Chicago (BAI50) surged +35.7% MoM, pushing it up by +61.9% YoY, higher than at any point since 2023.

By contrast, rates out of the US ended the month strongly, bucking the downward global trend. April’s levels were comfortably higher YoY, not only to Europe and South America but also to China, despite a sharp fall towards month-end. The index of outbound routes from Chicago (BAI50) surged +35.7% MoM, pushing it up by +61.9% YoY, higher than at any point since 2023.

At a macro level, market participants have been grappling with the potentially massive exogenous shock of a huge hike in taxes caused by swingeing new tariffs on goods imported to the US proposed by the Trump administration, as well as likely effects on inflation and business and consumer confidence.

Equity markets initially sold off sharply in early April after Trump announced his tariff plans. Initially, the recently re-elected president did not blink – not until US Treasury bonds sold off sharply too, threatening to send the US economy into a potentially serious tailspin.

After announcing a 90-day delay on most of the bigger tariff measures – except those on China of up to 145% – markets calmed down and recovered to some extent. Conditions then eased further after Trump backtracked more with exemptions for key imports such as mobile phones, computers and semiconductors – and more recently on auto parts.

Nevertheless, the new US administration has clearly set its sights on a total reordering of the global trade system to tackle what it sees as asymmetric trade barriers, particularly with China and the EU, even if that comes at the cost of recession in the US.

Many market participants continue to hope the higher tariffs – such as those on Chinese goods, which would likely cause a total collapse in US-China trade – are primarily a negotiating gambit. As a result, they remain hopeful deals will be struck at some point with China and the EU to negotiate the tariffs down and for trade to continue on more normal terms.

Even if that does prove to be the case, however, continuing uncertainty remains the biggest problem for markets to gauge.

For the air cargo sector in particular, all of this uncertainty continues to throw up huge challenges – and potential opportunities – that were discussed at length during the recent IATA World Cargo Symposium, held during April in Dubai.

Not least of the challenges was the imminent end of the so-called de minimis exemption, which hitherto exempted packages worth less than $800 from duty into the US. After an initial attempt to abolish the exemption earlier this year led to chaos at US customs, there was a delay on implementation, which is set to expire on 2 May.

There were some expectations air freight rates might rise ahead of that deadline if e-commerce shippers, for instance, rushed to move more product before the deadline expired. However, there was little evidence of that in the latest TAC air freight rate data, with sources reporting spot rates remained weak.

Sources also reported that some big shippers had already built up significant inventories of one to three months ahead, allowing a little time to cushion the blow of higher tariffs from China in particular while they developed alternative supply chain solutions.

There were some expectations air freight rates might rise ahead of that deadline if e-commerce shippers, for instance, rushed to move more product before the deadline expired. However, there was little evidence of that in the latest TAC air freight rate data, with sources reporting spot rates remained weak.

Sources also reported that some big shippers had already built up significant inventories of one to three months ahead, allowing a little time to cushion the blow of higher tariffs from China in particular while they developed alternative supply chain solutions.

In the short term, there were also reports of significant cancellations in ocean shipping – and many so-called ‘blank sailings’ or ships with no cargo.

Some were also viewing that as a potential opportunity ahead for air cargo to step in and get some of those cancelled shipments to market quickly – if and when trade conditions ease. Whatever happens next, it seems unlikely to be dull.

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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