The Baltic Air Freight Index rose by 1.17% month-on-month (MoM) to an average of 2,450.40 in September.

In a reversal of August, most of the main outbound indices saw upward trajectories in September, with Chicago O’Hare Outbound (BAI50) the only one to fall, with a MoM decrease of 1.43%.

Taken in full, airfreight prices are generally looking stronger as the fall season begins.

The Hong Kong Outbound Index (BAI30) was up 2.3% compared to August, while the Shanghai Pudong Outbound Index (BAI80) inched up by 0.91%. Elsewhere in Asia, the Singapore Outbound Index (BAI60) grew by 1.43%.

In Europe, the Frankfurt Outbound Index (BAI20) was 0.34% higher than in August, and the London Heathrow Outbound Index (BAI40) was 1.75% higher. 

EU to implement additional handling fee for e-commerce

Looking at the two major Asia-Europe indices in September, Hong Kong to Europe (BAI31) climbed by a robust 5.10% compared to August, while Shanghai Pudong to Europe (BAI81) was 0.26% lower, a notable divergence between the routes.

Looking at the two major Asia-Europe indices in September, Hong Kong to Europe (BAI31) climbed by a robust 5.10% compared to August, while Shanghai Pudong to Europe (BAI81) was 0.26% lower, a notable divergence between the routes.

It has now been three months since the temporary €3 fee for parcels worth less than €150 entering the European Union came into effect on 1 July.

B2B and B2C e-commerce parcel exports from China to the European Union have declined sharply as a result, with a year-on-year (YoY) drop of 55% in July and 27% in August, according to Cargo Facts Consulting analysis of China customs data.

Cargo Facts Consulting has also noted a corresponding reduction in Asia-EU freighter capacity, with MoM decreases of 11.5%, 13.7% and 1.6% in June, July and August, respectively.

As expected, the EU approved an additional EU-wide customs-handling fee for e-commerce imports in September. The amount has been set at €2 and the fee will begin on 1 November, potentially hurting Asia-Europe volumes heading towards the end of the year.

Trans-Pacific lanes still holding its own

On trans-Pacific lanes, meanwhile, rates continued their steady performance since August.

Hong Kong to North America (BAI32) and Hong Kong to USA (BAI34) grew by 0.81% and 0.93% MoM, respectively. Shanghai Pudong to North America (BAI82) was up 1.63%, while Shanghai Pudong to USA (BAI84) was up 1.57%.

As Asia-Europe maindeck capacity has gone down, some of it appears to have shifted to the trans-Pacific market over the past couple of months. Freighter capacity from Asia to North America increased 3.5% MoM in July and 2.9% in August, according to Cargo Facts Consulting analysis.

As Asia-Europe maindeck capacity has gone down, some of it appears to have shifted to the trans-Pacific market over the past couple of months. Freighter capacity from Asia to North America increased 3.5% MoM in July and 2.9% in August, according to Cargo Facts Consulting analysis.

The largest MoM rate changes overall in September were both in the trans-Atlantic market, with Chicago O’Hare to Europe (BAI51) jumping a bullish 13.14% and London Heathrow to USA (BAI44) rising by 9.12%.

Elevated fuel prices
One key factor driving rates is jet fuel prices, which have been elevated since March. In September, the cost of jet fuel rose to as high as $194.90 a barrel for the week ending 18 September, according to IATA.

That level had not been seen since the April peak of $209 and was more than double the sub-$100 prices of a year ago.

Unsurprisingly, every single index and rate in September was higher than a year ago, with Chicago O’Hare to Southeast Asia (BAI53) topping the list at 66.67% higher YoY, even though it had fallen 7.35% MoM.

More 777Fs
The industry will soon see more large-widebody capacity in the form of more 777Fs entering the global fleet.

In September, Boeing received an exemption from the FAA to make up to 35 more 777Fs between 1 January 2028 and 1 January 2031. The FAA agreed with Boeing that there is a public and economic interest in producing more current-generation 777Fs until the entry into service of the delayed 777-8F, currently scheduled for 2029.

It is clear that many carriers are desperate for more widebody capacity in the short term. One of those is Ethiopian Airlines, which announced at the end of September an order with Boeing for two 777Fs and eight 777-8Fs. Other operators are also continuing to grow their 777F fleets. Air China Cargo and China Cargo Airlines recently each took delivery of a new unit, while Saudia will likely receive the first of four newly ordered 777Fs in the coming weeks.

It is clear that many carriers are desperate for more widebody capacity in the short term. One of those is Ethiopian Airlines, which announced at the end of September an order with Boeing for two 777Fs and eight 777-8Fs. Other operators are also continuing to grow their 777F fleets. Air China Cargo and China Cargo Airlines recently each took delivery of a new unit, while Saudia will likely receive the first of four newly ordered 777Fs in the coming weeks.

September also saw the first flight of Airbus’ A350F prototype, kicking off a nine-month flight test campaign for the new freighter type. As the European manufacturer progresses toward certification and delivery by the end of 2027, the industry will be watching closely in the coming months for that newfound lift.

About Cargo Facts Consulting

Founded in 1978, Cargo Facts Consulting (www.cargofactsconsulting.com) is a leading air cargo consultancy and data provider. Through our specialised services in digital innovation, strategic planning, and growth management and data solutions, Cargo Facts Consulting helps its clients navigate the complexities of the air logistics industry.

 

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