News / Indian airfreight traffic takes off as rates and marketshare increase

Indian airfreight forwarders are reporting a noticeable uptrend in freight rates to/from major global markets as volumes grow because of the festive demand boost.

Air cargo rates from India to North America have increased by an average of 8% to 10% over the past two months, while India-Europe rates are up about 10%, versus the averages seen during June-August, a typical lean period following the demand downturn after the pandemic-linked trade upswing, say forwarders.

And inbound air freight rates have seen even higher increases since the end of September, compared with the previous three months. The North America-India sector was up 18%, with Europe-India rates registering a 15% rise, on average.

“It’s evident that consumers are also contending with inflationary pressures,” Jitendra Srivastava, CEO of Mumbai-based freight forwarder Triton Logistics & Maritime, told The Loadstar.

“While short-term challenges persist, there is optimism for long-term improvement as supply chains stabilise and economies adapt to the evolving landscape.” 

However, according to Mr Srivastava, any return to the pre-pandemic rate trendline remains distant.

E-commerce volumes have been a big boost for airlines during the festive season, according to forwarders, who also noted that rates have held firm after the end of the festive rush, and they expect the upcoming perishables trade season to drive rates up, as market reach for Indian fruit exporters expanded significantly.

Joy John, director of sea and air freight at Mumbai-based Jet Freight Logistics, told The Loadstar airfreight rates in/out of India had been more or less steady in recent weeks, after a festive-driven surge in volumes pushed rates higher.

“We are now seeing flat rates for export/import shipments,” said Mr Joy. “Some carriers have added more capacity on connections out of India … and, in a nutshell, the market appears bullish through mid-December.”

Vineet Malhotra, co-founder and director at Kale Logistics Solutions, also noted the rate uptick. He said: “Rates have moved northwards, which meant an overall 12% increase vis-à-vis September 2022. Indian domestic cargo saw a huge upswing, with Mumbai Airport reporting an 87% Y0Y increase in volumes last month.”

In a sign of improving demand conditions, Indian merchandise exports saw a 6% increase, by value, in October, year on year, the fastest rate of expansion in nearly a year, according to new government data.

“This suggests exports are on the road to recovery, due to the resilience shown by the sector,” said A Sakthivel, president of the Federation of Indian Export Organisations. “Demand is still an issue in many markets, due to high inventory, and growth reflects that we may be eating into the share of some other countries.”

However, Mr Sakthivel believes while geopolitical unrest in West Asia – a consequence of heightened hostilities between Israel and Palestine – has created a layer of uncertainty and scepticism in global trade circles, the conflict would have a limited impact on India’s export/import flows, unless it escalated and more countries joined in.

Meanwhile, Indian air cargo capacity could see further expansion as global investors position themselves to capitalise on the country’s promising economic outlook.

Middle East-based aircraft leasing and MRO service provider Vaayu Group has acquired a stake in Pradhaan Air Express, an all-cargo airline start-up that entered the Indian market with a converted A320 aircraft a year ago.  Specific details of the deal were not disclosed.

“Trade between India and the UAE is currently valued at around $60bn, with a potential to reach $100bn in the near future,” said Emad AlMonayea, chairman and president of Vaayu Group.

“Vaayu’s vision is to become a significant player in the air cargo space.”

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