Air cargo freight rates ex-China spike as much as 300%

china manufacturing

Driven by the return of China’s manufacturing sector, air cargo rates out of China are spiking as much as 300 per cent, as belly capacity has become virtually non-existent, says online booking platform Freightos.

The previous weeks have had the industry focused on Chinese supply as manufacturing slowly recovered across the country. But as the coronavirus outbreak spreads and the US and Europe struggle to respond, disruptions to western logistics to receive those goods in the near-term and the possible collapse of global demand is the new concern, Freightos warns.

As China’s manufacturing is kicking back into high gear, many US shippers who were looking for sourcing alternatives are focusing on China again. Freightos.com marketplace shippers searching for freight bookings out of South East Asia are once again looking at options from China nearly 92 per cent of the time, after an 8.0 per cent drop at the height of the Chinese shutdown five weeks ago.

And with this interest, freight rates have started to climb and climb rapidly. “Air cargo rates out of China are spiking – a trend exacerbated by the removal of most of the belly capacity that normally travels with passenger flights,” Freightos says.

Some forwarders selling on the Freightos.com marketplace reported increases in prices of 40 per cent over the last weeks, with others reporting more than 100 per cent and even up to 300 per cent increases in the last few days.

“The recent US travel ban on much of Europe has decimated the major airlines. More than 60 per cent of air cargo between Europe and the US generally ships on passenger flights, so as flights are cancelled air cargo rates are spiking,” it says.

Charter rates are surging too, leading many airlines to consider using passenger aircraft for cargo-only flights. This pivot is not as easy as it sounds, according to WebCargo’s VP Camilo Garcia Cervera. He also reports a spike in forwarders looking for real-time rate and capacity information on WebCargo’s eBooking platform, as digital tools are proving the most resilient during this fast-changing crisis.

Air cargo that does make it to US hubs may experience delays, Cervera warns, as the available flights may land further from and with fewer air connections to the destination than usual. Some shipments may have to be trucked instead, with some shippers exploring air options to Mexico or Canada followed by trucking to the US.

But trucking was one of the hardest hit links in the Chinese supply chain, with trucking rates in reeling Italy already on the rise. Road transportation is so far largely intact in the US, he adds, warning that New Jersey, for instance, has just introduced road restrictions impacting trucking, and if the situation worsens more disruptions could be on the way.

With much of northern California already sheltering in place, some factories already limiting their workforce, and many other industries working from home, it could be only a matter of time until the US economy shuts down nearly completely, Freightos warns.

Summary
Air cargo freight rates ex-China spike as much as 300%
Article Name
Air cargo freight rates ex-China spike as much as 300%
Description
Driven by the return of China's manufacturing sector, air cargo rates out of China are spiking as much as 300 per cent, as belly capacity has become virtually non-existent, says online booking platform Freightos.
Author
AsiaCargoBuzz.com
AsiaCargoBuzz.com
http://asiacargobuzz.com/wp-content/uploads/2017/04/NEW-LOGO1.png
ECS Group

Be the first to comment

Leave a Reply