Extreme weather and labor unrest are putting shippers and forwarders to the test, making October a ‘whole new ballgame,’ said Xeneta’s Niall van de Wouw.
Dive Brief:
September air freight by the numbers
YoY percentage increase in global air cargo demand
The average spot rate per kilogram, up 26% YoY
The expected reduction in cargo capacity across the Atlantic this winter
The global dynamic load factor, which measures the volume and weight of cargo flown, as well as available capacity
The YoY decline in U.S. Gulf Coast Kerosene-Type jet fuel prices
Global events are putting 2024’s air cargo peak season preparation to the test, said van de Wuow. But despite market volatility, companies are more prepared this year to handle peak season uncertainty, van de Wouw explained.
“There are now more precise agreements in place on how to navigate the storm the market is likely entering,” he said. “There are agreements around rates, surcharges, and the timeframes in which they can be applied, but there’s going to be a fine balancing act between maintaining relationships and being tempted by the short-term benefits these market conditions are creating.”
But 2025’s macroeconomic outlook isn’t great, he said, which may prompt carriers to capitalize on opportunities to increase rates. He added that there are signals that peak surcharges are already being accepted by forwarders and shippers.
In September, spot rates from Asia to North America “topped the chart in September,” according to Xeneta, surpassing other global corridors by more than $2 per kilogram. Meanwhile, the rates on the Europe to North America tradeline were roughly the same month over month, but may spike if the U.S. East and Gulf Coasts and Canada port strikes are not resolved.
With signed contracts there’s less room for the temptation of large rate increases during a hot peak season, said van de Wouw. “But we do see a piece of the market where you’ve got to ‘pay to play’ and that could become a potential ‘wild west.’ Shippers or forwarders may end up there due to unforeseen demand and it could be an expensive game,” he said.
Source: https://www.supplychaindive.com/news/september-air-cargo-volumes-xeneta-niall-van-de-wouw-port-strike/729911/
𝐀𝐋𝐒 – 𝐓𝐡𝐞 𝐋𝐞𝐚𝐝𝐢𝐧𝐠 𝐨𝐟 𝐀𝐯𝐢𝐚𝐭𝐢𝐨𝐧 𝐋𝐨𝐠𝐢𝐬𝐭𝐢𝐜𝐬