1. From Europe to the United States, as the impact of the COVID-19 on the global air cargo market has gradually decreased, there has been an uneven recovery in major trade routes.

On January 15, 23, the average price of ordinary goods by air was $4.18 per kilogram, down 14% from a year ago. This is due to the rebound in cargo capacity of passenger flights. However, compared with the market situation before the epidemic, due to the high operating costs (including labor and jet fuel costs), air freight increased significantly (up 72% from the level in 2019), while the supply and demand levels were higher than the average level before the pandemic. The sufficient capacity of the return trade enables the freight rate to avoid the pandemic peak in other places. On January 15, the average freight rate was US $2.08 per kilogram, down 4% from the same period last year.


2. Compared with the transatlantic corridor (where the abdominal capacity has fully recovered), the abdominal capacity from East Asia (including China, Japan and South Korea) to Europe is still far lower than the level before the pandemic. On January 15, the average air price from East Asia to Europe was $6.40 per kilogram. Although the supply recovery is slow, the air freight rate of this trade corridor has dropped by 29% year on year, which is more obvious. First, this is due to the weakening of European demand after the exceptionally strong peak in 2021. Secondly, part of the peak transport volume in 2021 has gradually shifted from air transport to sea transport. The shipping price has collapsed, and the reliability of the shipping schedule of the service network has now improved. Although the freight rate dropped year on year, the air freight rate from East Asia to Europe on January 15 was still 62% higher than the level before the epidemic. This can be attributed to the nearly doubling of aircraft fuel costs, the increase in operating costs caused by the closure of Russian airspace, and the limited belly capacity of passenger aircraft, especially those from China.


3. In terms of return trade routes, on January 15, the air freight rate for goods leaving Europe for East Asia was US $3.76 per kilogram. Compared with a year ago, it increased by 13%, and by 56% compared with 2019. On January 15, the average air freight price of ordinary goods from East Asia to the United States was $8.39 per kilogram. Similar to the air corridor from East Asia to Europe, the freight rate has dropped by 37% compared with last year. However, the current price level is still far higher than the US $4.52 per kilogram before the pandemic. The slow recovery of abdominal capacity and the high cost of aircraft fuel also affected this important corridor. On January 15, the return air freight rate was $2.44 per kilogram. In accordance with the same trend as the freight before departure, the freight rate dropped by 23% from last year's level and returned to the level before the pandemic.


4. However, with the decline of air cargo demand and the recovery of transport capacity, the range of air freight rates provided to shippers has been shrinking since the fourth quarter of 2022. This shows that freight buyers are gradually recovering their market power.


5. In April 2022, Xeneta launched the air transportation benchmark for temperature control (TC) transportation. Let's take a look at the air freight rate development of passive packaging services in the past quarter. In December 2022, the average air freight rate for temperature-controlled goods from the United States to Europe was $4.72 per kilogram. Due to weak demand, the passive temperature-controlled freight rate dropped by 5% from September. But it is more resistant than the freight rate of ordinary goods, which has dropped by 16%.


6. In December, the average temperature-controlled air transport price from Europe to East Asia was US $6.00 per kilogram. This is the only trade route that has experienced the increase of freight rate, which is 6% higher than that in September. This makes the price of temperature controlled goods 1.61 dollars per kilogram more expensive than ordinary goods, while in September, the price difference is only 1.08 dollars per kilogram.


7. In December, the average air temperature control price from the United States to East Asia was $5.24 per kilogram. Compared with a quarter ago, it decreased by 12%, while the decline in general goods was almost three times that. From the shipper's rate in January 2023, the rate level in December remains unchanged. Combined with the airline market data of Xeneta, it is expected that the temperature-controlled price will continue to be more resistant than ordinary goods under the market downturn in the first quarter.