Some airfreight trade lands face collapsing rates
Airfreight rates are continuing to drop on China-to-Europe and China-to-USA trade routes, pricing analysts have revealed. John Peyton Burnett, managing director of air cargo pricing specialist TAC Index, confirms the downwards trajectory, which is in stark contrast to the soaring personal protective equipment (PPE)-propelled prices in April, writes Thelma Etim.
“China-to-Europe and China-to-USA per-kilo rates are continuing to slide – down by US$1.06 and $0.57 respectively,” he points out. “Shanghai-to-Europe – primarily weighted by price drops into Frankfurt – have collapsed by $1.68,” he adds. Meanwhile, Hong Kong has now overtaken Shanghai’s prices into the USA, with a spread up to 30 cents altering the dominance of mainland Chinese exports, Peyton Burnett reveals.
Pacific routes might encounter negative impact on trade war escalation
“The forward curve reflects the drop-out of the index price, down 50 cents and 55 cents regarding China-to-Europe/China-to-USA in June. The full China-to-Europe 2020 price is lifted by indicative offers of about $3.80, whereas China to USA has dropped by 25 cents on a weakening immediate outlook.”
Elsewhere, Peter Stallion, broker at freight and commodity derivatives inter-dealer brokerage Freight Investor Services (FIS), observes there are still a number of socio-political economic factors that will affect the flow of more air cargo in consumer goods. “Across the Pacific, threats of trade war escalation, the scrapped Chinese airline ban, and a potential second [COVID-19] wave in Beijing rock a number of fundamental drivers for growing non-medical cargoes,” he notes.
Chinese passenger traffic still banned in USA.
Delta Air Lines and United Airlines are planning to resume flights to China, after the United States government reversed its decision to ban all scheduled Chinese passenger airline operations between the USA and China.
However, the decision to authorise the return of two weekly Chinese flights may be “amended, modified, or revoked at any time and without hearing,” warned the US Department of Transportation.
Meanwhile, Beijing has shut down its biggest vegetables market amidst a new cluster of Coronavirus cases. More than 100 cases have been traced back to the market after the Chinese capital city had been free of any new locally-transmitted Coronavirus cases for 55 days, reports the South China Morning Post.