While the market experienced a bit of a slowdown in April - Ramadan, Easter, and the lockdowns in China coincided with the introduction of the summer schedule, and more additional capacity.
Less freight and more capacity will lead to lower rates, right? In fact, this was substantiated by Clive Data Services reporting tonnage down by 7% and load factors down to 60% (which was low even by pre-Covid standards). This created a year-on-year dip in rates of 16%, according to Clive Data Services.
Indeed, it did. Especially on the Transatlantic passenger routes. But anyone in the business knows that the Transatlantic routes are not the issue. Unless of course you need a Freighter.
The real concern is Asia, Middle East, and the South Pacific. The ongoing war in Ukraine forces commercial traffic between Europe and Southeast Asia to fly the southern route over India. That prolongs the flight for a couple of hours and reduces payload. Less space, higher rates!
It also makes the Middle Eastern carriers more attractive, both from the US and Europe. Space is still scarce, and rates remain high. As an example, rates to Dubai are 200-300% over what was considered market rates a couple of years ago.
And ask the shippers urging for space to Australia…double digit rates are not indicative of a slowdown.
But all of this is old news, or yesterday’s news. Its going to get much better (or worse, depending on your role in this).
The real news is China re-opening on the 6th. Once China gets back up to a normal cadence, they will suck all capacity out of the markets. Charter flights will be even harder to come by, and rates into the US that are currently in the high single digits will probably spike at least 50%.
Here are a couple of ideas:
Air2Z – our online rate engine:
When you look up rates in our online rate engine Air2Z, please consider quoting your customer both the general rate AND the priority rate. We can easily hit a level where general rates will not give you space in the near future. For example, just click on “View Additional Rates” tab and you will see ExpeditedFS rates on American in this below example.
Consolidations:
Also, take advantage of our consols. They are not only affordable, but more importantly they are based on BSAs (blocked space agreements) or allocations, so your goods move when booking with Shipco’s consolidation services. Even at a low rate saving you time and money!
Air Imports:
Finally, we have the best import team in town! No matter the origin, or destination reach out to AirImport@Shipco.com.
For more information on our services and how Air2Z can satisfy all your airfreight needs (look up door to airport rates on over 50 carriers, quote your customer directly, book, view warehouse receipts, cargo images and your AWB, and track & trace. You even get a notification when your shipment departs. Air2Z is the only software you need to move your airfreight shipments!
For more details contact Renee Graves @ Rgraves@shipco.com
