What Happened
Global air freight rates increased 0.2% in the week to 14 September, with the Baltic Air Freight Index standing 20.2% higher year on year, according to TAC Index. Air Cargo Week reported the figures on 15 September. TAC Index said the impact of rising crude oil and jet fuel prices has yet to be fully reflected in global rates, and pointed to potential further upward movement. The Baltic Air Freight Index is a weekly measure of spot rates across major trade lanes, so it captures market pricing rather than contracted rates.
How a 20.2% Year on Year Rise Reaches UK Air Freight Quotes
The weekly move of 0.2% is small. The year on year figure is the one that matters for anyone budgeting fourth quarter air freight, because it says the market reached its current level some time ago and has held there. Fuel is usually quoted separately from the base rate and revised against a published fuel band, so a jump in jet fuel does not reach quotes in the same week TAC Index records it. When the band does move, it moves every consignment on that lane at once, whatever was agreed on the base rate.
That lag is the practical meaning of TAC Index saying the fuel effect is not yet fully reflected. Shippers on quarterly agreements will see it at the next reset rather than now, while spot bookings absorb it sooner. Surcharges apply per chargeable kilo, so volumetric cargo carries the increase disproportionately: at the standard airline divisor of 1:6000, a light, bulky pallet is charged on its dimensions, not its actual weight. Anyone booking air freight services on dense cargo feels the same percentage change less.
The step to take now is to ask for pricing that shows its parts. Request the base rate and the current fuel band separately at the point of quotation, along with the date the band is next reviewed, rather than accepting a single all in figure that hides which half is moving. For goods that are urgent but not time critical, compare the air rate against sea freight transit on the same lane before committing, and confirm whether an agreed rate is held to booking date or to departure date.
Key Takeaway
Rates are up 0.2% on the week and 20.2% on the year, per TAC Index, with the jet fuel increase not yet fully priced in. Expect the pressure to arrive through fuel band revisions rather than base rate changes, which means it lands on every shipment on the lane at the same time.
Market Impact
Fourth quarter is when air cargo capacity tightens on the main lanes, and a market already 20.2% above last year enters that period with little slack. TAC Index has confirmed the fuel cost movement; it has not forecast a specific rate outcome, and none should be assumed. What can be said is that a rising fuel band compresses the gap between air and premium sea options, which changes the calculation for goods sitting on the boundary between the two modes.
For UK importers, the immediate exposure is on shipments quoted weeks ago for delivery in the coming months. A quotation issued before the current fuel movement may not survive to booking, and the surcharge element is the part most likely to be restated. Check which element of each quote is fixed, confirm chargeable weight from actual dimensions before booking rather than from supplier estimates, and give purchasing teams the year on year figure alongside the weekly one when they set landed cost budgets.
Reported by the Plexus Freight team, from Air Cargo Week.
Source: https://aircargoweek.com/global-airfreight-rates-edge-higher-as-fuel-costs-surge/
