As anticipated, ecommerce platforms have begun cancelling flights and cutting back on capacity, while Chinese shippers with contracts are asking to switch to spot as airfreight rates fall.
Despite the ending of the lunar new year holiday that normally triggers a rate rise, Chinese forwarders are reporting rates are remaining low.
“The market’s a mess right now,” said one Chinese forwarder.
“While some airlines are increasing rates, such as Air China, others have dropped rates, including Etihad and Lufthansa Cargo. Generally, rates rise after Chinese New Year, but 2025 is strange and rates are still at a low level.”
The forwarder said China Eastern was offering unlimited density capacity at $3.61/kg to London from Shanghai, while Thai was offering $3.95 per kg via Bangkok to London.
WorldACD reported similar numbers: “Spot rates from China to Europe were relatively stable, dipping 2% in week five, and a further 4% in week six, to $3.91/kg – almost exactly their level in week six last year.”
The lack of rate hikes has been driven by ecommerce – or lack of that, said the forwarder, demand is significantly down.
“The key factor is ecommerce. We have received tender requests from the platforms and big guys, and the volume has reduced a lot,” noted the forwarder. “Our system shows a 57% volume reduction when compared with January 2024.”
He added that he had seen a number of flight cancellations – “Compared with January, we’ve seen 11% of flights cut.”
The forwarder added that he did not expect rates to rise this month.
“The reduction in the demand side is much greater than the supply side, making it difficult to increase prices.”
And the low spot rates are having a knock-on effect on the contract market.
“The big customers which have signed fixed-rates contracts are beginning to send quotation requests to us, which shows that fixed rates are much higher. Currently, they are at risk of breaking the contracts.”
WorldACD said it was “difficult to separate how much of [the recent] decline was simply linked to the annual holiday and factory closures in China, and how much resulted from the Trump administration’s sudden decision to revoke access to Section 321 customs-free de minimis import processes for imports from China”.
But tonnages from China to the US fell 20% week on week in week five, and were down 28% in week six, or 41% down year on year. Volumes from Hong Kong to the US fell 22% WoW in week five, and 13% in week six.
As a comparison, other countries which celebrate the lunar new year also saw sharp tonnage declines in week five of between 40% and 60% – but volumes rebounded in week six, with a 21% recovery in South Korea, up 68% in Taiwan, and up 31%in Vietnam. And spot rates to the US from those markets are “significantly above their levels this time last year” – suggesting that the de minimis ban out of China had made a big difference.
One UK forwarder added: “The de minimis withdrawal – once they sort out the platforms to actually do it – will have a huge impact this year on capacity and demand.“
The data analyst confirmed recent flight cancellations.
“The huge customs processing backlogs [in the US] led swiftly to that presidential order being suspended until ‘adequate systems are in place to fully and expediently process and collect tariff revenue applicable’, but in the meantime, dozens of ecommerce-loaded freighter flights have been cancelled,” it said.
Spot rates from China to the US dropped by 7%, WoW, in week five, and a further 3% in week six, to $3.99.kg, taking them down 19% year on year, with Hong Kong to US rates 14% down, YoY, added WorldACD.
The one sector where rates might rise, suggested the Chinese forwarder, was oversized cargo, owing to less capacity for the vertical – down 36% since January, and 47% year on year, he said.
Worldwide, rates based on an average mix of contract and spot fell 5%, taking average prices 3% below their market level last year, but the data is still confused by Chinese New Year, added WorldACD.
