Airfreight in Europe reached full capacity two weeks ago, online pricing platform Freightos reported last week. High spot airfreight rates in the subsequent weeks have been high enough to motivate shippers to reconsider ocean shipping as a viable option.
In addition to seasonally tight capacity affecting domestic and international freight shipments in the United States and Europe, recent bad weather in Europe is causing additional delays at some European airports including Zurich, Schiphol and Frankfurt.
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According to Freightos WebCargo CEO Manel Galindo, competition for airfreight capacity is pushing freight rates to prices that “aren’t realistic,” with forwarders paying more than US$20 per kilogram for capacity from Europe to South America and offer rates as high as $35 per kilogram.
For freight with margins that can’t absorb those high costs, “many shippers are no doubt reviewing their mode mix and looking to shipping by ocean next year,” Galindo added.
Air cargo is expected to remain congested with the holiday season until around Jan. 15. However, rates aren’t expected to stay low for long, as the Chinese New Year in mid-February will start pushing rates back up just as they calm down.
