Global air freight rates are entering the fourth-quarter peak season above the highest points of the last two peak seasons. The Baltic Air Freight Index, calculated by TAC Index, gained 4.7% in the week to 19 October and stood 26.4% higher than a year earlier1. TAC said the index is above the peaks that normally come before Thanksgiving in the US and Christmas in Europe1.
For Indian shippers of electronics, pharmaceuticals, perishables or garments on tight lead times, that sets the opening price for November and December bookings. Three pressures arrive at once: firmer fuel, tighter belly space on Indian routes, and forwarders choosing which accounts to keep.
Where the rise is coming from
The gain was led by the busiest lanes out of China to the US, and to a lesser extent China to Europe1. Rates on that second lane had lagged since July, after the EU ended its de minimis exemption for small parcels1. Spot rates out of Hong Kong and Shanghai have also been rising1. A week earlier the index slipped 2.1% during China's Golden Week holiday1.
Europe was the exception. TAC reported week-on-week falls on transatlantic lanes to the US and on lanes to India, Japan, Australia and South Africa1. The Frankfurt outbound index fell 6.6% on the week but remains 33.7% up year on year, and Heathrow slipped 2.3% while staying 35.2% up1. For an Indian importer, inbound cover from Europe is therefore softer this week than outbound Asia lanes1.
TAC's public commentary gives no index level for India-origin lanes, so India's air bill has to be read from the global and Europe indices plus forwarder quotes1.
Fuel sets the floor
Jet fuel is the main reason rates are unlikely to fall far even if demand cools. IATA's monitor put the global average jet fuel price at $192.44 a barrel last week, up 1.2% on the week before2. The same monitor, cited by TAC, put the year-on-year rise at 113.7% to 16 October, and TAC said this would "put a hard floor under rates at which airlines will carry cargo"1.
Aviation turbine fuel in Delhi was around ₹137 a litre after the 1 October revision, the third monthly increase in a row6. Prices rose by about ₹16 a litre in October, after ₹6.28 in September and ₹5 in August6.
Fuel now makes up around 50% to 55% of Indian airlines' operating costs, against the usual 30% to 40%, according to the Federation of Indian Airlines6. The body, which represents IndiGo, Air India and SpiceJet, has asked Delhi to keep its 7% VAT rate on jet fuel beyond 16 November6.
A weaker rupee adds to the bill, because air freight is priced in dollars. The rupee traded at 94.47 to the dollar on 21 October, 7.4% weaker than a year earlier7.
India's capacity is shrinking
Winter schedules add freighters on transatlantic and transpacific routes, not Indian ones. Lufthansa Cargo's plan lists up to 46 weekly rotations to 17 Asia-Pacific destinations8. JAL and Cathay Cargo have added transpacific capacity for technology shipments8. Air France and Lufthansa are shifting Mumbai freighter operations to Navi Mumbai, a gateway change rather than additional capacity8.
Belly space out of India is being cut too. Air India is suspending its non-stop Delhi to Copenhagen and Vienna flights this winter and reducing frequencies to Birmingham, London Gatwick and San Francisco3.
Demand is moving the other way. IATA reported global cargo demand up 4.4% year on year in August, while capacity fell 0.1%8. India's goods exports rose 23% to $44.4 billion in September, with electronics up 70.5%9.
Mumbai adds a longer-term risk. The airport operator wants to cut about 5 million passenger capacity from the 2027 summer schedule and told airlines they may move some international flights to Navi Mumbai. Carriers oppose the shift and talks resume on 28 October10.
Forwarders are choosing accounts
DSV and Kuehne+Nagel moved in opposite directions in the third quarter. Kuehne+Nagel carried 619,000 tonnes of air freight, up 9.8%, with air turnover up 38%, helped by semiconductor and cloud infrastructure customers5, 11. DSV's air volumes fell 3% to 560,890 tonnes. Chief executive Jens Lund told analysts about two percentage points of that decline came from "sanitising" lower-paying accounts4.
For a small Indian shipper, that is a signal. A forwarder pruning low-margin business has less reason to hold space for a thin account, and may leave it on spot rates4.
Carriers are also adding per-kg charges. Air Canada Cargo raises its carrier surcharge on 26 October, from 15p to 19p per kg for UK-origin shipments to Canada and the US North-east and Midwest8. Other long-haul destinations go from 29p to 36p per kg8. MSC Air Cargo moved to $2.30 or €2.30 per chargeable kg from $1.70 or €1.70 on 16 October8. JAL's Japan-origin long-haul fuel surcharge rose from ¥185 to ¥192 per kg8.
Not everyone expects a severe peak. One forwarder told the Loadstar: "For sure, we do not expect a peak season with rates doubling or anything"8.
| Measure | Latest reading | Change |
|---|---|---|
| Baltic Air Freight Index, global | Week to 19 Oct | Up 4.7% on week, up 26.4% on year1 |
| Frankfurt outbound index | Week to 19 Oct | Down 6.6% on week, up 33.7% on year1 |
| Heathrow outbound index | Week to 19 Oct | Down 2.3% on week, up 35.2% on year1 |
| Jet fuel, global average | $192.44/bbl | Up 1.2% on week2, up 113.7% on year to 16 Oct1 |
| ATF, Delhi | ₹137/litre | Up about ₹16/litre on 1 Oct6 |
What to do now
- Get the rate validity date in writing, and check whether the quote includes carrier surcharges or adds them later8.
- Fix allocations early. Winter schedules arrive six to ten weeks ahead, and airlines redistribute space. One forwarder described being cut from three pallets to two on a flight8.
- Ask whether your forwarder holds year-round block-space agreements on your lane. A forwarder said Asian procurement was less sensitive to the seasonal timetable switch for that reason8.
- If you import from Europe, test spot cover, because Europe outbound rates to India eased in the latest week1.
- Put 16 November in the contract calendar, when Delhi's 7% VAT on jet fuel is due to lapse6.