TL;DR: The Baltic Air Freight Index rose 4.7% in the week to 19 October and now sits 26.4% above a year earlier. Jet fuel is up 113.7% year on year, and TAC expects the fuel surge to set a floor under carrier pricing. China to US lanes lead the gains, while tonnage and capacity have both slipped.

Per TAC Index, as reported by The Conveyor and Air Cargo News, the Baltic Air Freight Index (BAI00) climbed 4.7% in the week to 19 October. Rates are now running above the highs of the last two peak seasons.

TAC noted that rates were already starting from elevated levels due to the Middle East conflict and the Russia-Ukraine war. Now fuel is adding another layer of pressure.

Jet Fuel Sets the Floor for Air Freight Rates

IATA’s Jet Fuel Price Monitor put prices up 113.7% year on year through 16 October. For context, earlier readings from the monitor showed prices up 108% on 2 October, and up 111.2% on 9 October after a 3.1% week-on-week rise. Fuel typically makes up 25% to one-third of air cargo costs, depending on aircraft efficiency.

TAC says the fuel surge will put “a hard floor” under the rates at which airlines carry cargo. Speakers at the EU Cross-Border E-Commerce Forum in Liege were cautious on the wider peak outlook, though they also saw higher jet fuel prices as likely to hold rates up. Sources said in late September that bigger impacts on rates could be only a week or so away. They also pointed to a shift towards fuel-efficient twin-engine aircraft over four-engine types.

China Lanes and Origin Markets Drive the Gains

The sharpest gains came on the busiest routes leaving China. China to US posted a strong weekly increase, led by Hong Kong and Shanghai. Freightos reported China to North America up 19% in a week to $6.88 per kg, while its global benchmark stood 30% above a year earlier. China to Europe gained less in the latest week and has lagged since July.

The early October picture was more mixed. TAC’s index fell 2.1% in the week to 12 October, in line with the usual China Golden Week slowdown, yet stayed 24.3% above last year. In the week to 5 October, BAI00 had jumped 5.0%. Elsewhere, BAI spot rates from India ran close to 70% higher year on year to the US and over 80% higher to Europe by early October. WorldACD logged a global spot rate of $3.55 per kg in the week of 5 October, up 34% year on year.

Capacity Tightens as Outbound Rates Split

Supply is shrinking. WorldACD reported tonnage down 1% for a third straight week in the week of 5 October, though still 9% above a year earlier. Global capacity fell 1% on the week. Gulf capacity sits 20% below late-February levels. Market sources said e-commerce players and other large shippers had already locked in peak space. Others, including AI hyperscalers, were still looking.

Outbound rates from Europe and North America moved unevenly. In the latest TAC reading, Frankfurt outbound fell 6.6% on the week but stayed up 33.7% year on year. London Heathrow slipped 2.3%, yet sat 35.2% higher than a year ago. These are separate weekly readings from the earlier 12 October data, when Heathrow’s index rose 12.1% and Frankfurt’s 3.0%, while Chicago dropped 29.0%. North American outbound rates firmed to China, the rest of Asia and South America, led by southbound routes from Miami. Transatlantic lanes weakened. Mexico-Europe rates posted significant weekly gains, per TAC.

Sources say Asia to Europe rates have remained weaker overall than those on intra-Asia and Transpacific routes, though they reported an increase in Europe-to-US pass-through business. On the e-commerce side, a new interim flat-rate EU customs duty of €3 per item was introduced at the start of July after the old de minimis exemption for small parcels ended, which forms part of the backdrop to cautious peak-season demand talk.

Cargo Solutions Network Perspective

Rates up 26.4% on last year, fuel more than doubled and capacity shrinking. In our view, that could be tougher for smaller independent forwarders, who may have less room to absorb swings in spot rates.

The split across origins matters too. India and Frankfurt outbound rates are diverging from those out of Hong Kong and Shanghai, so routing choices are not equivalent. TAC notes the peak usually runs ahead of Thanksgiving and Christmas, so quote early and aim to secure space ahead of that rush.

Frequently Asked Questions

How high are air freight rates compared with last year?

The Baltic Air Freight Index was 26.4% above a year earlier in the week to 19 October. Freightos had its global benchmark 30% higher, and WorldACD’s global spot rate was up 34% in the week of 5 October.

Why does jet fuel matter so much?

Fuel typically accounts for 25% to one-third of air cargo costs. With prices up 113.7% year on year, carriers have little room to cut pricing.

Which lanes are rising fastest?

China to US lanes lead, particularly from Hong Kong and Shanghai. Freightos had China to North America up 19% in a week to $6.88 per kg. China to Europe has lagged since July.

Is capacity getting tighter?

Yes. Global capacity fell 1% on the week, and Gulf capacity sits 20% below late-February levels. WorldACD also reported tonnage down 1% for a third straight week in the week of 5 October.

Plan Your Peak Season Capacity

Rates are firm and moving. Cargo Solutions Network supports independent forwarders with rate and market insight. Get in touch to plan your peak season capacity early.

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