News / High fashion: Red Sea disruption sees apparel shippers switch to air

© Dmitry Kalinovsky

It has begun. Forwarders are finally seeing air cargo demand rise as shippers look to avoid the disruption in the Red Sea – with garment makers leading the way.

Xeneta said today shippers in retail and apparel were beginning to switch to airfreight. Volumes from Vietnam to Europe spiked 62% in the week to 14 January, it said, some 6% higher than the October peak and 16% up on a year earlier.

Niall van de Wouw, Xeneta chief airfreight officer, said: “This is the first signal in Xeneta data that the Red Sea crisis is impacting air freight.

“This is typically a quieter time of year for air freight so to see increases of this magnitude, with higher volumes than at any point in 2023, is significant.

“Routes from Vietnam to Europe are used heavily for apparel, a sector we have been told is switching more goods from ocean to air due to the Red Sea crisis, so it is particularly noteworthy we are seeing volumes increase to such an extent on this trade.

“We should also recognise that the upcoming lunar new year may also be contributing to the increase in volumes.”

Rates from Vietnam to Europe rose 10% over the previous week and Mr van de Wouw said the next fortnight would reveal whether this was a one-off, or whether shippers were looking at a longer-term shift to air.

WorldACD said preliminary figures for the week ending 14 January showed air cargo tonnage up 24% over the previous week.

It said: “There have been anecdotal reports in recent days of cargo owners switching some cargo from sea to air, because of longer ocean voyages caused by the disruptions in the Red Sea.

“Although it’s unclear yet to what extent this has contributed to air cargo demand, those elevated tonnage figures to Europe from Asia Pacific and from Middle East and South Asia likely reflect some contribution from modal shift on these lanes from sea to air and to sea-air. 

“In contrast to the higher tonnages ex-Asia Pacific to Europe, demand ex-Asia Pacific to other markets declined.”

It added that despite the demand growth, rates had yet to rise significantly.

However, Flexport this week warned customers that airfreight rates would likely rise. Regional airfreight manager Milena Milenkovic said: “In many cases, the budget for 2024 should be revised.

“If you have the possibility to source elsewhere, you should start looking away from the Far East,” she added. “The recommendation for air is to book shipments maybe five days before Chinese New Year [10 February], closer to that date, some might be cancelled.” 

Another forwarder told The Loadstar he was seeing “lots of issues and delays, especially on westbound from Asia and Indian sub-continent”.

He added: “The impact on airfreight is happening, and becoming apparent.”