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Home » Air rate index at lowest levels in 13 months, firm says
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Air rate index at lowest levels in 13 months, firm says

August 6, 2013
DC Velocity Staff
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A transportation consulting company said today that its monthly index of international airfreight rates fell in June to the lowest level since it was launched 13 months prior.

London-based Drewry Maritime Research reported that a weighted average of rates across 21 transatlantic, transpacific, and Asia-Europe trades fell by 2.7 points over May to 94.3 points. Drewry expected some pricing erosion due to seasonal issues, but it was surprised to see rates sink to the lowest point since May 2012.

"We expect airfreight pricing to remain under pressure until the end of this holiday season, after which carriers are expected to rein in capacity, which should buoy rates," said Simon Heaney, Drewry's research manager, in a statement.

Despite the decline in pricing, the firm's "East-West Air Freight Price Multiplier," which measures the differential between air and ocean container rates on east-west trades, widened 1.2 points in June to 15.3 points. The multiplier reached its widest point since it was launched in May 2012. The June number reflects an even more rapid decline in container freight rates in June than airfreight rates, Drewry said.

Ocean rates on the trades dropped 10 percent in June, though they recovered in July, Drewry said.

Air and ocean freight rates have been dropping consistently over the past year as both sectors grapple with subpar global demand and equipment overcapacity.

Transportation Air Maritime & Ocean
KEYWORDS Drewry Supply Chain Advisors
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