News / Warning of peak season airfreight capacity challenges out of Asia

© Daniil Peshkov

As the industry heads into the peak season for airfreight, cargo owners are facing challenges to securing capacity out of Asia.

Some origin and transit points are already struggling with congestion while capacity there can only be secured by paying premium rates, warned Hong Kong-based logistics provider Dimerco in its latest market update.

A lot of lift has already been snapped up by large e-commerce firms that have signed-up peak charter flights out of Asia, especially from China, further crimping available capacity, reported Dimerco’s analysts.

Consumer electronics shipments will be another big driver of demand, starting this month. This will include shipments of iPhone 16s from China, since Apple moved manufacturing back there, tand spot rates have already climbed to $9-$10 per kg.

The situation is particularly acute in origins in South-east Asia that have seen the migration of manufacturing from China, and this is also putting pressure on transit points like Hong Kong, Taiwan, Korea and Japan, Dimerco noted.

Traffic from Asia to Europe is facing backlogs of one to two days at some Asian airfreight gateways, while lift out of most others is tight, necessitating advance booking.

To North America, several gateways are experiencing backlogs and Dimerco is rating the situation in Manila as ‘critical’, which is characterised by some bookings being rejected and alternative routes to move cargo becoming necessary.

To secure capacity out of the Philippines, cargo owners have to pay express rates, and transit times are currently exceeding three days, said Dimerco, adding that transit cargo has been the most-affected by the situation. The country is also experiencing challenges in ocean freight.

“Manila port is experiencing some congestion causing delays of two-to-four days for berthing,” reported Dimerco, adding that “there is a lack of 40ft high-cube containers for export from the port.

And shippers are facing backlogs at both major Vietnamese gateways, Ho Chi Minh City and Hanoi, affecting airborne exports to North America and Europe. Express rates will be applied for urgent shipments, Dimerco warned.

The other gateway in the region hit by congestion is Singapore, where capacity challenges have been aggravated by the fact that some airlines no longer fly to Europe over Iranian airspace, and some no longer accept bookings to Europe, New York and Houston, raising the spectre of increased backlogs, extended transit times and higher rates.

“Airfreight rates and demand from Singapore for long-haul routes are expected to remain high through the end of the Q4 peak season,” the analysts warned.

Meanwhile, airfreight capacity to North America and Europe is also tight out of northern China, Korea, Japan, Indonesia, Malaysia, Thailand and India, Dimerco reported. And out of east and south China, Dimerco predicts pricing to Europe, which had fallen during the summer, will pick up this month. Likewise, rates from south China to North America are expected to rise this month.

However, in nearly all markets cargo owners are not likely to face competition for lift from rivals seeking to divert freight from ocean to air transport. By mid-August, spot ocean container rates had retreated by more than 20% from their peak in early July. Five carriers announced general rate increases from 15 August in an effort to prevent further rate erosion, Dimerco’s analysts observed.

They added that container lines had blanked 37 sailings by mid-August, 70% of these in the transpacific market.

Container rates from Taiwan to North America have gone up, though, as has airfreight pricing from the island, both to Europe and North America.

Ocean capacity – as well as airfreight lift – is also tight out of Thailand, which is entering its peak export season, Dimerco noted.