Anger as Cathay Pacific Cargo adds GRI to blocked space agreements
Cathay Pacific has added extra fees to some of its blocked space agreements, the first ...
The mad dash to avoid container shipping delays has seen some airfreight rates climb by ten times in a single week.
Yesterday, Hellmann Worldwide Logistics told customers: “The already tense situation in the airfreight market has worsened dramatically in recent days.
“An imbalance between supply and demand is emerging, with airlines continuing to convert passenger aircraft into temporary cargo planes, yet finding this is not enough.”
Indeed, according to the forwarder, both regular airfreight shipments and charter costs have “exploded” and, in some cases, “increased tenfold within a week.”
Hellmann added: “Many airlines are now operating at nearly 100% capacity, which means airports are heavily congested and global delays are inevitable. This situation is currently evident at import airports such as Atlanta, Frankfurt and New York.
“With a view to the end of the peak season, we therefore expect this situation to worsen further.”
Dan Morgan-Evans, global cargo director at Air Charter Service (ACS), said there was “unprecedented” demand for charter flights, fuelled by a massive 500% increase in ocean freight rates on the major tradelanes, driver shortages in Europe and the continued lack of belly capacity.
“We are already seeing charter prices rise to record levels,” he explained. “As more aircraft are booked up, we are having to find aircraft from increasingly large distances to service key routes. This is a particular problem in Asia at the moment, with transpacific prices hitting $2m for a charter on a Boeing 777 for the first time, compared with around $750,000, at its best, pre-pandemic levels.”
Mr Morgan-Evans said ACS had received calls from retailers that “normally wouldn’t dream of chartering”, since there’s no ad-hoc scheduled capacity left in the market.
“It is looking like it might be what you could call a ‘peak peak season’,” he added. “As a result, we will no doubt have to use ‘preighters’ to keep up with the demand.”
Express airlines are also adding freighter capacity to attempt to meet the rising demand in the Asia Pacific region. For example, FedEx has expanded its services to Europe and North America in the run-up to Christmas, adding 62 flights a week in and out of Asia Pacific, including new services from Japan and Taiwan, with additional weekly capacity of around 2,700 tons.
The integrator has also increased its intra-Asia network capacity by replacing Boeing 757 narrowbody freighters with B767 widebody freighters, doubling cargo capacity to Indonesia, Vietnam, Thailand and the Philippines.
Not all forwarders are reporting overheated demand in recent days, however. With Shanghai Pudong operating smoothly again after multiple Covid-linked disruptions, one Chinese forwarder said the market had been quieter, due to Golden Week, although he expects demand to pick up again later this week.
He told The Loadstar: “For the time being, the market seems to be steady – rates to certain destinations are slightly raised and the others have kept the previous rates unchanged.”