Air freight rates are going to rise!

 

Edgy air cargo market could see 'a crazy' peak season rates boom

Air freight rates may have edged up in the past month – but forwarders are reporting that falls in capacity due to cancelled flights, combined with vast amounts of distressed sea freight, could see a “crazy” market next month.

“We cautioned last month that a cooling in rates was likely to be short-lived and, as we see a re-acceleration, particularly on US-bound routes, that may turn out to be the case,” Bruce Chan, of Stifel, told the Baltic Exchange.

……

And, he said: “Retail inventory to sales ratios are still near record lows.”

Finally, he argued: “As high as air freight rates are right now, with detention and demurrage and the risk of stock out, the traditional gap between fully loaded ocean costs and air freight rates may have actually narrowed.”

……

“I have not seen much sea freight converting to air recently, but I’ve heard that some traditional retail cargo might need air freight from late August,” said one Shanghai forwarder, adding that any rate increases so far were likely driven by lack of capacity.

……

“Recently the three major Chinese airlines cancelled all international flights with crew needing to stay overnight. These included some flights to Paris, Frankfurt, etc. Only flights where the crew does not need stay overnight will operate as normal.

“This has caused a general rate increase, especially since last Monday. This week, rates out of Shanghai are almost stable, but ex-Guangdong and Beijing, they keep going up further.”

He added that, with no new capacity, cancellations were exacerbating the space shortage.

“From the second half of August into September, rates are more likely to keep going up – the question is, by how much?”

……

A Singapore forwarder, meanwhile said the market was stable.

“Capacity and demand is kept constant and there’s been no big increase in rates. However, the situation may worsen from September, which is the traditional peak season for airfreight.”

He added that large capacities had been allocated to big clients, and there was little space for ad hoc bookings. As a result, sea-air via the hub was “an ideal choice for moving large volumes within a shorter timeframe”, although rates were only “slightly cheaper” than pure air.

……

Source：By Alex Lennane 

10/08/2021 from theloadstar.com

Sea + air transportation may be a better mode of transportation than pure sea and air transportation at present.

Frightened like a roller coaster mood is the daily life of freight forwarders. Sweatly came to the company but hadn't been sitting on the seat, and was notified by the marketing department where the price had risen again, and the fee would be increased. However, the colleagues of Sunny Worldwide Logistics have never taken a step back. The key to dealing with "instability" is to inform customers in advance and adjust plans for customers in time.