China’s air cargo market with Latin America is rapidly expanding, prompting shippers to consider the implications for the upcoming peak season.
Shippers need to consider several factors before negotiating with freight forwarders for the remainder of 2024. China is the second largest trading partner for Latin America (behind the US) and the top trading partner for the South America region, making this one of the world’s fastest-growing corridors.
Air cargo spot rates from China to Latin America have more than doubled from May 2019 to May 2024. On the return leg, spot rates from Latin America to China have seen a modest increase compared to May 2019 levels. The growth in fronthaul rates is particularly notable for Brazil, Latin America’s largest economy. In May, the average spot rate from China to Brazil reached USD 6.46 per kg, USD 1.60 per kg more expensive than the spot rate from China to the US. This is a significant change from May 2019, when the average spot rate from China to Brazil was just over 40 cents higher.
Looking at the changes from one month to the next, spot rates from China to Brazil rose by 5% in May compared to April. Once more, this surpassed the performance of spot rates from China to the US, which decreased by 2% during the same period.