TPM: When the higher cost of air cargo can pay dividends
Air cargo has become a staple for shippers in a volatile post-Covid market, but does ...
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By Alex Lennane
Uncertainty on freight rates for the next year is concerning both shippers and carriers as they consider committing to 12-month contracts – both in air and sea.
One way of reducing risk is through index-linked agreements (ILAs) – but carriers have concerns that rates could fall to unsustainable levels.
Stanley Smulders, director of marketing & commercial at Ocean Network Express (ONE), told a Xeneta event last month that rates were still volatile.
“Individual tradelanes will remain volatile, particularly on a short-term basis. The ...
Comment on this article
Matthew Gore
November 06, 2023 at 2:54 pmIn light of where the market currently is, carriers will be hoping for some improvement, however small, over the course of 2024-25. As most ILA mechanisms have some lag with the adjustment of their freight rates, this will defer any increase shippers face. Certainty of securing space is another advantage of ILAs as against fixed contract rates which later get overtaken by the spot market. The jury is out on whether that may happen in the next 12-15 months.