News / Shippers 'running out of options' to get their peak season goods out of Asia

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Cargo owners that haven’t made firm arrangements to move peak season cargo out of Asia by air are running out of options, warns logistics provider Dimerco.

Most direct, reliable freighter capacity has already been snapped up, it said.

Capacity on long-haul routes out of China and other countries in East and South-east Asia has been tight, driven by strong demand for e-commerce and a shift of container traffic from ocean to air,  a result of extended transit times, congestion, limited capacity and soaring container rates, Dimerco notes in its latest airfreight market report.

Singapore has struggled with backlogs to North America and Europe.

Dimerco Express Group VP Kathy Liu noted that more less-than-containerload shipments were likely to shift to airfreight, particularly on transpacific routes. Further pressure has come from shippers front-loading – rushing to land goods in the US ahead of new tariffs, she added.

Dimerco is warning shippers that haven’t firmed up space allocations that doors on many of the best options are already closed.

Widebody freighters are fully booked through the fourth quarter, and airlines have split their block space agreements into smaller segments, particularly on the China-US sector. And reverting to charters is going to be a rather limited option this year, according to Dimerco.

“Widebody freighter charters with optimal routes and aircraft conditions are already sold out,”its sales team reported.

The forwarder is advising cargo owners to explore multiple options to ship their goods. For one customer in the fashion industry, looking to move product from Vietnam to the US during the pandemic, Dimerco bypassed the congested Ho Chi Minh City gateway by trucking the goods to Bangkok, the spokesman noted.

Extended routings should also be considered. Dimerco has been moving airfreight out of Vietnam to the US via Guangzhou, using carriers that fly direct from the Chinese gateway to North America.

It said using deferred airfreight services may be an option for shippers, if it is planned sufficiently early. This could generate substantial savings over express and standard airfreight pricing, but airlines may be reluctant to commit capacity this way, preferring to hold space for more-lucrative ad hoc deals.

And rail freight traffic from China to Europe has also increased in response to the pressures on ocean transport, Dimerco noted.

“The main driver of rail freight’s popularity from China to Europe is its relatively faster speed, cheaper cost compared with air and reliability. Many China-based manufacturers are under pressure from European customers to meet specific delivery windows,” said a Dimerco spokesman.