The uncertainty and volatility in the world economy and the air freight market continues with the war in Ukraine and Covid outbreaks in China impacting capacity and production. The TAC Index reached its highest level in mid-April since the end of the last peak period, although it had fallen by 7% from this level by the week ending 3 May.

The average increase for the month of April versus March was 12% and up by 27% versus the same period in 2021, up by 20% versus 2020, and up by 152% versus April 2019. Fourteen lane indices saw an increase in April over March and only two indices were down on the previous year.

The average increase for the month of April versus March was 12% and up by 27% versus the same period in 2021, up by 20% versus 2020, and up by 152% versus April 2019. Fourteen lane indices saw an increase in April over March and only two indices were down on the previous year.

The differences by market in the airfreight indices are detailed below.

CN/HK Markets

China and Hong Kong markets both experienced positive air freight increases versus March and last year.   Shanghai’s capacity and production continued to be constrained due to Covid restrictions.

  • The indices (BAI31 & BAI81) to Europe saw strong gains versus March: Hong Kong was up by 19% whilst China was up by 8%. 
  • Both markets saw strong gains to North America with HKG  up by 17% versus March whilst PVG was up by 12%.
  • Hong Kong to Southeast Asia (BAI33) rates increased 12% month on month.

US Market

The market ex Chicago saw a mixed performance versus March.

  • ORD – EUR (BAI51) fell by 3%, although it was still up versus the previous year by 30%.
  • In contrast, ORD – SEA (BAI53) saw an increase of 6% versus March and was up by 41% versus last year.

EUR Markets

The European markets continued to see some mixed performance in March versus last month, with FRA up by 5% whilst LHR was up by 13%.

  • FRA – US (BAI24) declined 2% versus March and but was up by 27% versus last year. 
  • FRA – SEA (BAI23) was up by 10% over last month and up by 78% versus 2021.
  • LHR – US (BAI44) was up by 12% versus March but declined versus last year by 16%.
  • LHR – SEA (BAI43) was up by 14% month on month and up by 60% versus the previous year.

SEA Market

SIN to SEA (BAI63) was down 3% versus March.

It is likely that air freight rates will stay at levels significantly above pre-pandemic levels for some time, although volatility and uncertainty is set to continue in the world economy.

Gareth Sinclair, Advisor to the Board, TAC Index

Gareth started with British Airways Passenger Business in Financial & Commercial management roles almost 30 years ago. In 2007 he joined British Airways World Cargo, driving significant transformation in Pricing and Revenue Management systems. As Head of Revenue Management and Pricing for IAG Cargo, he introduced enhanced analytical capabilities, dynamic bid price vectors and the move towards dynamic pricing.