Despite the massive challenges, our air freight team continue to find solutions for critical cargo and our Sea/Air services are invaluable for time-sensitive shipments. With options from across Asia, via a choice of hubs including Singapore, Colombo and Dubai, we offer the widest choice of service, transit and rates.
There is a massive surge in demand for air freight globally, but particularly across Asia, due to continued shipping disruption. Vessel and loading delays at loading ports are negatively impacting transport from origins, that are further compounded throughout transit to arrival port, with haulage issues added to the mix, when they do eventually get released to destination.
The same scenario is being experienced to some extent globally and particularly across the USA, which has endured more turbulence than the UK.
Despite this massive and sustained demand, air capacity from China and Hong Kong continues to suffer due to COVID restrictions, as Cathay’s August volumes confirmed, at just 66% of the same period in 2019.
Enhanced Covid rules at Chinese airports are impacting ground handlers and air crew, which drives down capacity and as a result rates are climbing daily on all routes driven by supply versus demand dynamics, with China-US air cargo rates reaching new highs, even beyond those experienced in 2020 during the PPE supply crisis.
The absence of passengers – and scheduled flights – is creating challenges in capacity, as shippers gear up for peak season. Goods continue to fill fewer planes, but worsening long haul passenger demand hinders freight growth, in particular between Asia and Europe and the Americas.
Converted ‘Preighters’ are unlikely to offset rising air cargo demand and there is a finite number of pure freighters available in the market which will add delays as peak season continues to build.
Retailers, as widely publicised in the national and international press, are desperate to ensure that shelves are stocked for the Christmas period, but reliance on time critical air freight increases pressure on global air cargo supply chains.
And this pressure will increase even further when the traditional air freight peak season picks up pace, with tech product launches and manufacturers trying to restore reduced stock and inventory levels.
Shippers are increasingly turning to our Sea/Air services, with demand up 25% over the last week, and climbing at all major hubs including Singapore, Colombo and Dubai, as shippers move urgent consignments to gateway airports where they can be transferred to air freight.
The traditional ‘go to’ charter option is increasingly difficult to obtain, with three to four week lead time weeks and the North American market draining capacity, by paying much higher rates and making transpacific routes more lucrative.
Scheduled flights are still very limited and even though freight rates are high airlines are still losing money, without revenue from passengers, which means that cargo is the prime income for many, as it has been for the last 18 months, which is keeping pricing high and forcing it higher.
Airlines are not negotiating like shipping lines, by seeking longer term contracts, but are leveraging the supply chain versus demand imbalance to create a ‘pay to play’ environment, that maximises revenue potential.
Despite the massive challenges, our air freight team continue to find solutions for time-sensitive shipments, but it can take up to three weeks to get lifted from some origins.
We work closely with our global network to monitor market capacity and identify service opportunities that might benefit our customers.
Evaluating and blocking space on viable services early, is a critical factor in achieving deadlines based on customers’ requirements and expectations, including the constant recalibration of our hybrid sea/air platforms and hub services.
Please call Elliot Carlie or Grant Liddell for further insights and advice.
As much visibility and planning into the final quarter that you can provide will ensure that we can create a tailored and bespoke solution, to deliver your product to market – at the right time.