Airfreight market continues to fly – for now

The surge in Asia to Europe ocean freight (see ‘Ex-Asia spot rate spiral turned into shooting star’) is also boosting demand for airfreight to Europe and even to North and South America.

Uncertainty and delays with ocean shipments have been encouraging more shippers to transfer to airfreight and the increased demand has prompted airlines to withdraw long-term winter and summer schedule rates in favour of offering rates on a monthly, or even shorter basis for shipments from Asia to Europe and America.

Disruption has also boosted sea/air transhipments via the Middle East and Indian sub-continent, with tonnages up 40% year on year.

Ex-India pricing is up 164% year on year and remains exceptionally high, while rates from Dubai and Colombo were up 44% and 51% respectively, year on year.

Strong demand and disruptions to container shipping in the region caused by the ‘Red Sea’ situation continue to stimulate very strong air cargo demand from the Middle East and South Asia (MESA) regions.

Reports that ocean carriers are denying bookings could potentially boost air cargo further, as shippers seek to protect supply chains.

However, retailers’ spring/summer stock is in-country, so anything coming in now is going to warehouses and stores, so there is a definite reduction in retail demand for time-critical shipments.

Other industries may continue with distressed ocean freight, but this too has definitely reduced.

So, the air freight market will soften and capacity has increased with the summer scheduling. All in all, the market is now in a healthy state, with a decent balance of supply versus demand, for the time of year.

In the short term we expect the market to soften further, with no huge product launches, stable demand and hopefully geopolitical stabilisation (albeit with a very unstable level as the starting point).

The Red Sea crisis could mean Middle Eastern airlines are well-placed to pick up any extra business via sea/air routes, with Emirates and its strategic partners harnessing their strengths to move over 11,000 tonnes.

For urgent, valuable and sensitive shipments we have a range of airfreight and sea/air solutions, with block space agreements (BSA) and capacity purchase agreements (CPA) that protect space and capacity on the busiest routes.

Regardless of your cargo type, size and requirements, we have extremely competitive rate and service combinations, to meet every deadline and budget.

EMAIL Elliot Carlile, Operations Director, for insights, prices and advice.