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Airfreight capacity under pressure

Freight forwarders are struggling to secure airfreight space as increased global demand puts pressure on capacity and rates

Airfreight capacity under pressure

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Freight forwarders are struggling to cope with a lack of global airfreight capacity, as rates soar on some lanes as high as US$8 per kg, reports supply chain magazine The Loadstar.

There is “nowhere to turn”, one Asia-Europe airfreight forwarder, who reported a seven-to-ten-day backlog out of Asia, told the publication.

“Rates are going sky high – and going up every weekend. It’s about US$4 per kg as an average, and airlines are getting choosy over the type of freight they are accepting,” he said.

One of the biggest problems for is the current volume of ecommerce cargo, which is daily, and higher-yield, according to one source, the report said.

“It’s a carrier’s market. Airlines are definitely becoming more selective with what they take and accept. E-commerce is a massive issue this year.”

There is also less capacity around to handle peaks in demand, following the withdrawal of freighter capacity by combination airlines in lacklustre years, as well as a move towards aircraft such as the cargo-unfriendly A380, The Loadstar writes.

It has also been reported that scheduled airlines are pulling freighter flights to operate charters, booked up by big names for product launches. One source indicated that Coca-Cola alone operated 12 charters last week from Ireland to the US, while Samsung, Apple and Amazon are also thought to have booked significant amounts of capacity.

“The problem for shippers is that they are looking for alternatives, but everyone’s pot is full, so loyalty throughout the year is being rewarded,” said one source.

The airfreight market is particularly tight out of Hong Kong, mainland China and South-east Asia, with the situation “worsening by the week”, The Loadstar reports.

One forwarder in Asia said that the air-freight rate kept rising, because forwarders had a significant backlog in warehouses, while the e-commerce sales days, starting with this Saturday’s Singles Day, were exacerbating the situation. Alibaba reaped more than US$17.8bn in sales on that day last year – a figure likely to rise this year.

Airlines out of Asia are fully booked to the EU, with Cathay, Emirates, and Finnair said to be taking bookings for one week’s time. Philippine Airlines is reported to be struggling with connecting flights, with the second leg requiring more than one week in transit.

Space out of Malaysia to the US and EU is said to be “tight”, but “critical” out of Taiwan, where one source says China Airlines has a 35-ton backlog.


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