Air cargo rates for shipments out of China surged last week in the final full week ahead of Lunar New Year, according to figures from WorldACD Market Data, as shippers rushed to get their goods shipped before a holiday which shuts down many logistics and manufacturing operations across Asia for several weeks.
The Lunar New Year period this year began on February 10, the night of the second new moon following the winter solstice. It launches the Year of the Dragon and celebrates the coming of spring and a time of renewal, according to a commemoration by the U.S. Postal Service (USPS). For people of Chinese, Korean, Vietnamese, Tibetan, and Mongolian heritage in many parts of the world, the event marks a period of parades, parties, decorations, and gifts, USPS said.
As many observers travel to spend time with family during that holiday, global supply chains are often affected. According to WorldACD, that triggered rates for air cargo shipments from China to North America to rise by 14%, week on week (WoW), in week 5 (29 January to 4 February), although rates are still well below their level in early December. Similarly, China to Europe rates rose by 8%, WoW, although rates on this lane are also still well below their fourth-quarter peak levels in early December.
While freight rates typically jump ahead of the holiday, WorldACD also noted that other geopolitical events may complicate forecasts this year. “It is unclear to what extent this pre-[ Lunar New Year] demand is being boosted by the disruptions and delays to container shipping in the Red Sea, which have also reportedly led to some conversion of China-Europe sea freight to sea-air shipments, via the Gulf and to some extent via the US west coast. Air cargo prices from the Gulf to Europe remained broadly flat in week 5, WoW, and below their level in early December,” the firm said in its report.
Similar effects are also seen on the tonnage of freight moved, as WorldACD noted that worldwide tonnages so far this year are significantly higher than the equivalent period last year. However, factors such as Israel’s war on Hamas may also be impacting that data, the firm said.
“On the tonnage side, WorldACD data continue to indicate strong traffic demand levels from China to Europe, as well as to North America, and also ex-Gulf to Europe, whereas this time last year traffic was slowing down, although it is impossible to measure the extent of the Red Sea impact on this traffic due to the huge impact of LNY. Indeed, the magnitude of the Red Sea impact on air freight will probably only become clear well after LNY, when it may be possible to identify whether we have structurally different flows, depending also on the development of that crisis and many other factors,” the WorldACD report said.
