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The pandemic worsened through July in many parts of the world, with the United States seeing case counts crest around the middle of the month.
But consumer spending is improving — rising 1.9% in July compared to June, according to the Bureau of Economic Analysis. The increased demand for goods, coupled with capacity pulled from the market, has kept airfreight rates at elevated levels.
Airfreight rates from China and Hong Kong to the U.S. are currently around $5.33 per kilogram, according to the TAC Index. This places rates above their level before the pandemic — they are about in line with the 2019 peak season — but well below the rate peak in May resulting from the rush to import personal protective equipment from Asia.
The peak rate in May was about 75% higher than the 5-year average, according to Drewry.
"Traffic continued to recover in June and July, fueled by the restart of economic activity and easing of lockdown measures in several key economies," Drewry wrote in a note Wednesday. "Nevertheless, pricing continued its retreat from the peak levels in April and early May, as demand for PPE declined and shippers diverted cargo to less expensive modes of transport."
Drewry expects the rates to remain at their elevated level due to the loss of belly capacity and said "product launches like PS4 could even produce spikes."