WEAKNESS in air freight demand has prompted shippers and logistics providers to avoid longer-term contracts that lock in space commitments, according to market researchers and industry professionals, reports New York's FreightWaves.
Air cargo volumes dropped for the ninth consecutive month in November, falling eight per cent from the prior year and two per cent month over month, according to an update by market intelligence firm Xeneta.
Goods moved on large aircraft was eight per cent below that of November 2019, a weak year for cross-border trade.
Market conditions worsened in November from the prior two months in what is normally the busiest, most lucrative time of the year for cargo airlines and air logistics providers.
According to the Baltic Air Freight Index, a weighted basket of nearly two dozen air freight routes for general cargo, global air rates have dropped 40.7 per cent year over year.
Fears of a widespread recession, exacerbated by high inflation and the ongoing war in Ukraine that are stifling spending on goods, are prompting supply chain operators to prepare for less business next year.
Freight forwarders are protecting themselves from the uncertainty by signing fewer long-term commitments for space allocations sold by airlines, according to a bulletin from the TAC Index, a rate benchmarking company that enables the Baltic Exchange's displays. Pricing for long-term contracts remains higher than on the spot market.
Chicago-based AIT Worldwide Logistics is making reservations based on ad hoc pricing as the market adjusts and expects to establish more long-term contracts again if rates, as some forecast, level out in the first quarter, a spokesman said in an email.
James Constantinidis, director of air freight at UWL, said the Cleveland-based logistics provider is exclusively relying on spot market transactions for exports out of Asia and most European moves to the US.
SeaNews Turkey
Air cargo volumes dropped for the ninth consecutive month in November, falling eight per cent from the prior year and two per cent month over month, according to an update by market intelligence firm Xeneta.
Goods moved on large aircraft was eight per cent below that of November 2019, a weak year for cross-border trade.
Market conditions worsened in November from the prior two months in what is normally the busiest, most lucrative time of the year for cargo airlines and air logistics providers.
According to the Baltic Air Freight Index, a weighted basket of nearly two dozen air freight routes for general cargo, global air rates have dropped 40.7 per cent year over year.
Fears of a widespread recession, exacerbated by high inflation and the ongoing war in Ukraine that are stifling spending on goods, are prompting supply chain operators to prepare for less business next year.
Freight forwarders are protecting themselves from the uncertainty by signing fewer long-term commitments for space allocations sold by airlines, according to a bulletin from the TAC Index, a rate benchmarking company that enables the Baltic Exchange's displays. Pricing for long-term contracts remains higher than on the spot market.
Chicago-based AIT Worldwide Logistics is making reservations based on ad hoc pricing as the market adjusts and expects to establish more long-term contracts again if rates, as some forecast, level out in the first quarter, a spokesman said in an email.
James Constantinidis, director of air freight at UWL, said the Cleveland-based logistics provider is exclusively relying on spot market transactions for exports out of Asia and most European moves to the US.
SeaNews Turkey