Against a background of IATA’s estimated 9.3% growth in world cargo volumes for 2017, airfreight rates have been dramatically up this peak season, reports online platform Freightos.
Freightos stated: “While some rates have eased recently, others are heating up. Most US airlines canceled 7-10 scheduled flights coming in from China between December 22-30, especially those going to Los Angeles, O’Hare and Dallas-Fort Worth.
“Russia’s AirBridgeCargo and China Southern Airlines have also posted flight schedule cancellations on the China-US route. Given that cargo space on this route is still quite tight, these cancellations are pushing rates back up.
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It continued: “Across in Europe, intermittent bad weather has taken a toll, increasing backlogs and contributing to high airfreight rates. A typical Asia-Europe shipment on the spot market with flexible transit arrangements normally goes for around $2-$5/kg. But over recent weeks, the new norm has become $7-$10/kg.
“The same goes for Europe-US shipments. Shipments to JFK are normally between $0.80 and $1.30/kg, but recently they’ve been in the $5-$10/kg band.”
Manel Galindo, chief executive of Freightos WebCargo, has seen higher rates still going through: “Of course, urgent shipments are going for a lot higher. Last week, we saw Hong Kong to Europe going for $21/kg, and Europe to South America at $26/kg.
“China-Europe rates will stay high. Even where there is some flexibility, rates will stay in the $7-$10/kg band for several more weeks yet. The current backlog probably won’t fully clear before the lead up to the Chinese New Year closedown starts.”
Ocean rates are up too, with mid-December general rate increases (GRIs) having some effect on the transpacific lanes, for now at least.
China-US West Coast increased 11% from the previous week. Carriers will be hoping this continues to hold, and upcoming GRIs have an effect, because, with the exception of China-Europe, rates remain well down on last year.
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The next GRI is scheduled for January 1 and is unlikely to be as effective, stated Freightos, adding: “There won’t be a GRI mid-month. However, there almost certainly will be a significant GRI on February 1, catching shipments needing to get out before the Chinese New Year (CNY) close down. CNY falls out on Friday 16 February this year.”
