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  • RISA (UK) Ltd

Air freight rates make for an interesting summer

Air freight rates have increased significantly in advance of the summer season with some airlines putting prices up by over 30%. This is due to a rise in demand and the subsequent pressure on capacity.

Although there was still a quieter period in the first quarter of 2018, bringing rates down a little around Chinese New Year, volume growth still improved on that of 2017.

The greatest rate increases have been seen around South American routes, where manufacturing is strong and there is little air freight capacity at present.

Rate rises were also high on routes out of Europe, particularly to Asia and the US due to strong trade. April 2018 rates from the Far East to Europe are 14.1% up from the same month last year.

Air freight space is now at a premium and with airlines either unwilling or unable to add additional capacity to their fleets, this is unlikely to change in the short term. Some carriers are pooling their space to make the most efficient use of what they have available to meet demand for space and it is expected that these alliances may become more commonplace. More charter flights are being booked to bridge the gap in capacity, however this has driven up those rates also.

Advice for shippers who need to move their goods via air is (as always) to plan ahead, however this is now truer than ever is space is to be secured at a palatable rate.

Although this outlook does not look set to change, external pressures may have an impact.

Uncertain trade relations between the US and China may decrease rates over the usually buoyant summer period as this would significantly impact industries such as e-commerce.

The situation continues to be monitored closely.

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