Thursday, January 18, 2018

Sky-High




Airfreight rates soar thanks to e-commerce, tight capacity and Chinese New Year.

Add air cargo to the transportation sectors where rates are climbing to new heights.
Largely fueled by a sharp rise in e-commerce, which is viewed as a long-term trend increasing demand for express airfreight in the China-US lane, airfreight rates are reaching new, unprecedented levels. Strengthening economies and US companies restocking after the holidays, coupled with years of belt tightening by air carriers, are also contributing to the new reality.

The burgeoning demand comes after a protracted period of weak demand in air shipments, during which carriers cut rates to compete and cut operations to the bone, hurting their ability to handle the current surge in shipments. The lack of capacity has led to congestion at airports, delaying shipments and adding to costs.

The situation is especially acute in the run up to the annual Lunar New Year on Feb. 16, leading Western companies, especially retailers, to stock up before Chinese factories go dark. Across the board, cargo owners making shipments from China to the US are looking at rates up to double what they paid last quarter, and shippers requiring urgent airfreight over the next three weeks may well find their costs have tripled.

Further constraining the ability of the system to process increasing shipments, the International Air Transport Association (IATA) predicts that rapidly rising passenger and cargo demand could see hundreds of airports, including most of the European gateways, reaching capacity in the next 10 years.

Shippers looking for relief from spiraling air express costs are turning to services such as Totalogistix's AirFreight.bid, simply the best way to do airfreight, and finding the best available pricing.


Kirk Shearer
President
TOTALogistix
www.totalogistix.com
800-989-0054 x103

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