Interest Rates Slide Further Amid US-China Trade Thaw

Last week, global airfreight rates took another small dip, as reported by TAC Index. The Baltic Air Freight Index (BAI00) saw a 1.0 percent decrease for the week ending May 19, marking a notable 5.1 percent drop compared to the same time last year.

These numbers indicate that we’re not seeing an immediate uptick in rates following the recent agreement between the U.S. and China to lower their steep tariffs—at least not in the next three months.

when looking at shipments from China, ther was a slight increase in rates heading to Europe; however, routes to the U.S. experienced declines due to changes affecting small package exemptions that were anticipated after the trade deal was struck. The outbound index from Hong Kong (BAI30) rose marginally by 0.1 percent week over week but is still down by 3.3 percent year on year—a trend influenced partly by rising spot rates for European destinations.

On the flip side, Shanghai’s outbound index (BAI80) fell sharply by 3.5 percent this past week and is now down a staggering 14.2 percent compared to last year’s figures. interestingly, while Bangkok and Seoul saw increases in their European shipping rates, Vietnam’s costs dropped for Europe but increased for shipments heading toward the U.S., wiht India also reporting slight decreases both ways.

In Europe itself, transatlantic shipping costs have decreased towards both China and the U.S., yet there’s been an uptick in prices going to Japan instead. Frankfurt’s outbound routes (BAI20) climbed up slightly by 0.7 percent this past week—still showing a healthy increase of 2.6 percent from last year—but London Heathrow’s index (BAI40) fell back by about 0.7 percent weekly and is now trailing behind last year’s levels by around 6.7 percent.

From North America’s viewpoint, airfreight costs dropped on routes leading to both Europe and China but saw an increase towards South America rather; Chicago’s outbound index (BAI50) rose impressively by 1.8% this past week alone—an impressive jump of over 23% when viewed against last year’s statistics.