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Xeneta Air Freight Update, Jan'23 | An uneven recovery slash rates on main fronthaul trades

From Europe to the US, the average general cargo air freight rate was USD 4.18 per kg on 15 January 2023, down by 14% from a year ago.

Xeneta Air Freight Rates

As the Covid-19 pandemic slowly eases its grip on the global air freight market, an uneven recovery emerges across the top trades.

From Europe to the US, the average general cargo air freight rate was USD 4.18 per kg on 15 January 2023, down by 14% from a year ago. This is attributed to the bounce-back of cargo capacity from belly hold on passenger flights. 

But compared to pre-pandemic market conditions, the air freight rate is highly elevated (up by 72% from the 2019 level) due to higher operating costs, including labor and jet fuel costs, while both supply and demand levels are above their pre-pandemic averages.


Adequate capacity on the backhaul trade allows rates to avoid the pandemic peak seen elsewhere. On 15 January, the average air rate was USD 2.08 per kg, a small 4% decline from the same time last year.

In contrast to the transatlantic corridor, where belly capacity has fully recovered, belly capacity for East Asia (including China, Japan and South Korea) to Europe remains much lower than the pre-pandemic level. 

The average air freight rate from East Asia to Europe was USD 6.40 per kg on 15 January. Despite the slow recovery in supply, the air freight rate on this corridor fell a more noticeable 29% year over year. Firstly, it is due to the weakened European demand after an unusually strong peak in 2021. Secondly, a part of the peak volume in 2021 has been gradually shifting from the air back to ocean transportation. The ocean freight rates have collapsed, and the schedule reliability of the service networks has now improved.

Despite the year-on-year drop in freight rate, East Asia to Europe air freight rate on 15 January remained 62% above the pre-pandemic level. This can be attributed to nearly doubled jet fuel costs, increased operational costs due to the closure of Russian airspace and constrained passenger belly capacity, especially from China.

On the backhaul trade, the air freight rate for cargo leaving Europe for East Asia was USD 3.76 per kg on 15 January. It is up by 13% from a year ago and an eye-catching 56% from the 2019 level.

The average general cargo air freight rate from East Asia to the US was USD 8.39 per kg on 15 January. Similar to East Asia to Europe corridor, the freight rate substantially dropped by 37% compared to last year. But the current rate level remains well above the pre-pandemic USD 4.52 per kg. The impact of the slow recovery of belly capacity and high jet fuel costs is also taking its toll on this vital corridor.

The air freight rate on the return leg was USD 2.44 per kg on 15 January. Following the same trend as its fronthaul, the freight rate dipped 23% from the last year’s level, returning to its pre-pandemic level.

Last but not least, air freight rates have been more spread out from their average levels since the onset of the pandemic. This indicates that freight sellers had increased power to set their rates and choose their customers. It is especially observed on the front-haul lanes -transatlantic westbound, Asia to Europe and the transpacific eastbound trades. 

But with falling air cargo demand and restoring capacity, the spread of air freight rates offered to shippers has been narrowing since Q4 2022. This shows that freight buyers are gradually regaining their market power. 

Temperature-controlled cargo market

air2Xeneta launched air freight benchmarking for temperature-controlled (TC) transports in April 2022. Let's take a look at the air freight rate developments for passive packaging services in the past quarter. 

From the US to Europe, the average air freight rate for TC goods was USD 4.72 per kg in December 2022. Due to the weak demand, the passive TC rate declined 5% from the September level. But it was more resistant than the general cargo freight rate, which experienced a drop of 16%.

For Europe to East Asia market, the average TC air freight rate stood at USD 6.00 per kg in December. This is the only trade that experienced a rate increase, up by 6% from September,

This left TC cargo at USD 1.61 per kg more expensive than general cargo, whereas, in September, the delta was only USD 1.08 per kg.

In December, the TC air freight rate from the US to East Asia was USD 5.24 per kg. It fell a noticeable 12% compared to a quarter ago, while the decline seen on the general cargo side was nearly triple this number.

Looking at the shipper rates into January 2023, the December rate levels remain in place. Combining this with Xeneta's airline market data, we expect the TC rates will continue to be more resistant than general cargo for the market downturn in Q1.

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