Airfreight rates remain firm in August despite summer lull

Airfreight rates in August remained firm despite the air cargo market's summer lull being in full swing. The latest Baltic Air Freight Index (BAI00) calculated by data firm TAC Index shows that overall rates were almost unchanged across the month, bucking usual seasonal trends that see prices decline across the summer months. TAC said the flat pricing partly reflected higher fuel prices, which, according to IATA were up by around 8.2% over the month to 28 August as fighting between the US and Iran ramped up. Demand levels also remain firm, with cargo tonnages up 6% year on year in August. Rate performance in August represents a turnaround from July when prices fell by almost 9%. Compared with last year, rates in August were up by 18.1% due to the Middle East conflict and soaring data centre/semiconductor demand levels. "Rates remained at relatively elevated levels at a time of year when people take summer holidays and cargo volumes usually ease off," TAC said in a monthly market summary "This summer or 'low season' period often sees rates falling through a combination of demand easing and passenger traffic increasing, which can add extra bellyhold capacity." While rates at a global level were flat in August, there were exceptions. TAC pointed out that rates from China to Europe declined by 11.3% during the month, possibly reflecting lower e-commerce volumes on the trade after the European Union added a €3 charge for low-value packages entering the bloc. This decline came despite carriers removing capacity from the trade lane. "Asia-Europe volumes and rates were falling over much of July and into early August, but there were also signs the market was beginning to adjust to the EU's new interim flat-rate customs duty, with rates starting to stabilise in mid to late August," TAC said. Meanwhile, rates from Asia to North America continued to soar, with prices from China to the US up 28.7% year on year in August. Looking ahead, TAC editor Neil Wilson said the peak season could be governed by how the semiconductor market performs, after signs that the industry has been cooling after a period of rapid investment. "The biggest swing factor for the strength of peak season may be how the AI theme continues to play out," said Wilson. "Some suggested that the recent momentum reversal may reflect investors pausing for thought about the sheer scale of investments by so-called 'hyperscalers' like Amazon, Microsoft and Google in the race to build and operate huge global data centres. "On the other hand, others suggest that the recent correction was perhaps exaggerated by rapid deleveraging, while the underlying performance of those firms is still strong. If so, that race to build data centres could well escalate demand further in the final quarter through the traditional peak season."

Who will end up buying Europe's freight forwarders?

I recently wrote about Europe's succession problem in logistics. Thousands of privately owned freight forwarders and transport companies are reaching the point where their owners would quite like to retire, while the next generation often has other plans. Germany has some particularly uncomfortable numbers, although there is little reason to assume the problem stops at the border. Judging by the reaction to that column, one question comes up rather quickly. If all these companies are going to be for ...

ACS Germany adds new cargo business development director

ACS Germany has appointed Timo Kaden as cargo business development director as the company looks to continue to expand its presence in the country. ACS described Kaden as "hugely experienced" and said he would be based at the firm's Frankfurt office. "Timo brings with him 30 years of logistics expertise - he has worked for some of the biggest names in freight forwarding and has a wealth of contacts in the airfreight business," said ACS Germany chief executive Caroline Werf. According to his LinkedIn profile, Kaden previously worked for KN Airlift for the past 18 years, while he has also worked for JAS Forwarding. The company has expanded its presence in Germany in recent years and now has four offices in Munich, Cologne, Stuttgart and Frankfurt. "Timo's experience will help build and guide our growing team of cargo experts, with his vast knowledge and expertise," added Werf. Kaden added: "I have worked in the cargo business in Germany for my entire career and am looking forward to starting this new chapter, building on business relationships across the country. "We have an amazing cargo team here and I'm looking forward to working closely with them going forward." ACS has seen its revenues significantly increase in the first half of the year, led by rising demand in its cargo division.