Air freight rates out of Vietnam driven up by Red Sea crisis and Lunar New Year demand
Air freight rates from Vietnam to Europe are on the rise. The combination of demand from the ocean freight disruptions and Lunar New Year is finally driving up prices.
TAC Index data shows that, although air freight volumes increased in the two weeks to the 22nd January, the average achieved price per kg from Vietnam to Europe decreased (-20%). This trend has reversed with rates to Europe increasing 15.9% WoW to the 29th January.
With the current ocean freight disruptions air cargo demand increased earlier this year relative to Lunar New Year. Air cargo volumes increased by 79% in the week to the 15th January, in line with the volume increase (75%) seen in the same period in 2023. This increase came a month, rather than 2 weeks, before Lunar New Year. We now enter the typical demand period with higher sustained volumes and increasing prices.
If we look in more detail at the volume dynamics leading up to Lunar New Year we observe similarities and differences with previous years. The differences are likely caused by the ocean freight disruptions.
Vietnam to Europe: air cargo volumes up earlier than usual
In the lead up to Lunar New Year there is usually an increase in air cargo volumes from Vietnam to Europe. You can see this for the last three years in the chart above. Volumes increased 79% in the week to the 15th January this year, with a similar increase of 75% observed in the first two weeks of 2023. So this move is not atypical for this time of the year.
There are two major differences relative to the preceding years. First, is in the timing relative to Lunar New Year. Usually volumes increase two weeks before the holidays, but this year the increase comes a full month beforehand (see chart above). Second, is in the size of the increase relative to peak season volumes. This year, volume increases are above peak season whereas in the previous two years the increase in volume remained below peak season highs.
This early timing and relative size of the increase indicate that these changes are related to the ocean freight disruptions.
You can track the impact on Vietnam to Europe air cargo prices at TAC Index.
Air freight rates out of Vietnam driven up by Red Sea crisis and Lunar New Year demand
Air freight rates from Vietnam to Europe are on the rise. The combination of demand from the ocean freight disruptions and Lunar New Year is finally driving up prices.
TAC Index data shows that, although air freight volumes increased in the two weeks to the 22nd January, the average achieved price per kg from Vietnam to Europe decreased (-20%). This trend has reversed with rates to Europe increasing 15.9% WoW to the 29th January.
With the current ocean freight disruptions air cargo demand increased earlier this year relative to Lunar New Year. Air cargo volumes increased by 79% in the week to the 15th January, in line with the volume increase (75%) seen in the same period in 2023. This increase came a month, rather than 2 weeks, before Lunar New Year. We now enter the typical demand period with higher sustained volumes and increasing prices.
If we look in more detail at the volume dynamics leading up to Lunar New Year we observe similarities and differences with previous years. The differences are likely caused by the ocean freight disruptions.
Vietnam to Europe: air cargo volumes up earlier than usual
In the lead up to Lunar New Year there is usually an increase in air cargo volumes from Vietnam to Europe. You can see this for the last three years in the chart above. Volumes increased 79% in the week to the 15th January this year, with a similar increase of 75% observed in the first two weeks of 2023. So this move is not atypical for this time of the year.
There are two major differences relative to the preceding years. First, is in the timing relative to Lunar New Year. Usually volumes increase two weeks before the holidays, but this year the increase comes a full month beforehand (see chart above). Second, is in the size of the increase relative to peak season volumes. This year, volume increases are above peak season whereas in the previous two years the increase in volume remained below peak season highs.
This early timing and relative size of the increase indicate that these changes are related to the ocean freight disruptions.
You can track the impact on Vietnam to Europe air cargo prices at TAC Index.