Getting ready for air freight demand peaking during ‘peak’ season

While air freight demand from Asia and the Far East to the US has remained high, buoyed by eCommerce and inventory replenishment, demand into Europe has not been so strident in June, but even so rates are now beginning to rise.

May and June are normally a slack period and the air freight market from Asia to Europe has been a little subdued for a few weeks, with rates stable over the backend of June, which should suggest the market has bottomed out, but now rates have started to pick up and there are general rate increases planned by major airlines, which suggests there has been a surge in cargo and capacity is now under pressure due to the uptick in demand for faster modes to market.

The US market has been stable too, but about two weeks ago we saw rates begin to increase again. Quickly on some lanes.

The typical peak season for air freight is from the middle of August until the middle of December and we are expecting a busy Christmas, with volumes already beginning to increase in our pipeline.

We are seeing increasing cargo volumes from the Indian subcontinent and while China and Hong Kong had been relatively quiet, we are also seeing that change over the last week, with the market likely to be very busy by August and beyond, into The UK and Europe.

Hong Kong is steady, with freighter services and  ‘passenger-freighter’ operations continuing to replace the bellyhold capacity that has been lost due to reduced passenger flights, with much ‘distressed sea freight’ traffic resulting from capacity and schedule problems due to the widespread port congestion.

In reality the situation remains very fluid, with many factors influencing the market, so it’s incredibly difficult to identify real trends, their causes, or likely outcome. But it will become clearer over the coming weeks as all logistics options are being utilised and a realisation that there are not improvements with the ocean freight market.

While several carriers have begun ‘reconverting’ passenger aircraft for normal operations, which will reduce some cargo capacity for air freight, other Asian carriers are converting more aircraft for cargo operations, so the hope is that balance will be maintained and, if we’re lucky, some new capacity will be added.

With demand already growing ahead of this year’s ‘normal’ peak season, it is likely to remain high, as many sectors recover and look to grow despite the pandemic situation, with manufacturing picking up across the globe and world GDP forecast to grow by 6% in 2021 and even more in 2022.

We work closely with leading airlines and cargo carriers to offer the widest range of time-sensitive solutions, routes and transit times at the most competitive rates and we are looking at adding capacity with charter operations in Q3 and Q4, to support customers.

We welcome expressions of interest and will share further information as we develop our plans to deal with the extended ‘peak season’ demand. We are currently finalising charter operations for the second half of the year and would welcome interest on where to play these aircraft to support your own anticipated requirements.

If you have urgent or time-sensitive consignments and would like to explore options, transits and costs, please contact Elliot Carlile or Grant Liddell for all options available to ensure that deadlines are always met.