عربي English Türkçe اردو فارسى
Logo
Latest News
Business

Air Freight Rates Rise Amid Red Sea Crisis

An employee checks freight at a ramp of Frankfurt airport, Germany, November 27, 2020. REUTERS/Ralph Orlowski/File Photo Acquire Licensing Rights
An employee checks freight at a ramp of Frankfurt airport, Germany, November 27, 2020. REUTERS/Ralph Orlowski/File Photo Acquire Licensing Rights
TT
20
TT

Air Freight Rates Rise Amid Red Sea Crisis

An employee checks freight at a ramp of Frankfurt airport, Germany, November 27, 2020. REUTERS/Ralph Orlowski/File Photo Acquire Licensing Rights
An employee checks freight at a ramp of Frankfurt airport, Germany, November 27, 2020. REUTERS/Ralph Orlowski/File Photo Acquire Licensing Rights

Global air freight rates have climbed for the first time in seven weeks as attacks on Red Sea shipping prompt companies to secure costlier air cargo space.

The Baltic Air Freight Index, which shows general cargo weekly transactional rates across a number of routes, rose 6.4% in the week to Monday, price reporting agency TAC Index said, reversing declines since a mid-December seasonal peak.

Attacks by Yemen's Iran-aligned Houthi group on vessels in the Red Sea, launched to express solidarity with Palestinians in Gaza, have forced shippers to take longer routes that can add weeks to delivery times, Reuters reported.

"The increase is in line with expectations that rates may spike following disruption to ocean shipping in the Red Sea, though sources also point out that rates often rise in the run-up to Chinese New Year," TAC Index said.

Many factories in China close for the 8-day holiday which begins this year on Feb. 10 and companies push to get stock out to customers ahead of this.

Air freight rates out of Shanghai rose 8.8% week on week on Monday, led by big increases to Europe. Rates out of Hong Kong gained 5.9% and rates out of Southeast Asia jumped 10%.

The Red Sea, which leads to the Suez canal, lies on the key east-west trade route from Asia's manufacturing hubs to Europe and then on to the east coast of the Americas.

In recent weeks freight companies have been securing more air cargo space and some customers have begun shipping goods wholly or partially by air to avoid delays.

However air freight prices had remained relatively stable as the shipping crisis coincided with a post-Christmas lull in demand.

Most Viewed

 
Business

Oil Rises on Rebound in China's Imports, But Trade War Concerns Persist

Representation photo: Pumpjacks are seen in oilfields along Highway 33, known as the Petroleum Highway, west of Buttonwillow, Kern County, California on April 9, 2025. (Photo by Frederic J. BROWN / AFP)
Representation photo: Pumpjacks are seen in oilfields along Highway 33, known as the Petroleum Highway, west of Buttonwillow, Kern County, California on April 9, 2025. (Photo by Frederic J. BROWN / AFP)
TT
20
TT

Oil Rises on Rebound in China's Imports, But Trade War Concerns Persist

Representation photo: Pumpjacks are seen in oilfields along Highway 33, known as the Petroleum Highway, west of Buttonwillow, Kern County, California on April 9, 2025. (Photo by Frederic J. BROWN / AFP)
Representation photo: Pumpjacks are seen in oilfields along Highway 33, known as the Petroleum Highway, west of Buttonwillow, Kern County, California on April 9, 2025. (Photo by Frederic J. BROWN / AFP)

Oil prices edged up on Monday after Chinese data showed a sharp rebound in crude imports in March, although concerns that the escalating trade war between the United States and China would weaken global economic growth and dent fuel demand weighed.
Brent crude futures gained 6 cents, or 0.09%, to $64.82 a barrel at 0632 GMT. US West Texas Intermediate crude futures were trading at $61.59 a barrel, up 9 cents, or 0.15%.
China's crude oil imports in March rebounded sharply from the previous two months and were up nearly 5% from a year earlier, data showed on Monday, boosted by a surge in Iranian oil and a rebound in Russian oil deliveries.
However, Brent and WTI have lost about $10 a barrel since the start of the month, and analysts have been revising down their oil price forecasts as the trade war between the world's two largest economies has intensified.
Goldman Sachs expects Brent to average $63 and WTI to average $59 for the remainder of 2025 and sees Brent averaging $58 and WTI $55 in 2026.
It sees global oil demand in the fourth quarter of 2025 rising by just 300,000 barrels per day year-on-year, "given the weak growth outlook," analysts led by Daan Struyven said in a note, adding that the demand slowdown is expected to be the sharpest for petrochemical feedstocks.
BMI, a unit of Fitch Solutions, cut its Brent price forecast to $68 from $76 a barrel for 2025 as it expects slowing economic activity to erode demand.
The Brent price spread between December 2025 and December 2026 has also flipped into contango as investors priced in oversupply and demand concerns, BMI said. In a contango market, front-month prices are lower than those in future months, indicating no shortage of supply.
Beijing increased its tariffs on US imports to 125% on Friday, hitting back against President Donald Trump's decision to raise duties on Chinese goods and raising the stakes in a trade war that threatens to upend global supply chains.
Trump on Saturday granted exclusions from steep tariffs on smartphones, computers and some other electronics largely imported from China, but on Sunday he said he would be announcing the tariff rate on imported semiconductors over the next week.
The trade war has heightened worries that unsold exports could continue driving domestic Chinese prices down.
"Inflation data from China were a window into an economy that is not in shape for a trade fight. Consumer prices fell for a second month in a row in year-on-year terms, while producer prices chalked up their 30% straight fall," Moody's Analytics said in a weekly note, referring to data released on April 10.
As companies prepare for a possible decline in demand, US energy firms last week cut oil rigs by the most in a week since June 2023, lowering the total oil and natural gas rig count for a third consecutive week, according to Baker Hughes.
Potentially supporting oil prices, US Energy Secretary Chris Wright said on Friday that the United States could stop Iran's oil exports as part of Trump's plan to pressure Tehran over its nuclear program.
Both countries held "positive" and "constructive" talks in Oman on Saturday and agreed to reconvene next week in a dialogue meant to address Tehran's escalating nuclear program, officials said over the weekend.
"This may help remove some of the sanction risk affecting the oil market, particularly if talks keep on moving in the right direction," ING analysts led by Warren Paterson said in a note.