High rates from tight air freight capacity in Europe drive shippers to sea
HIGH spot air cargo rates since air freight in Europe reached full capacity have prompted shippers to reconsider ocean shipping as a viable option.
On top of seasonally tight capacity affecting domestic and international freight shipments in the United States and Europe, recent bad weather in Europe is causing additional delays at some airports including Zurich, Schiphol and Frankfurt.
According to Freightos WebCargo" target="_blank" class="external noeffect">Freightos WebCargo CEO Manel Galindo, competition for air freight capacity is pushing freight rates to prices that "aren't realistic," with forwarders paying US$20 per kilogramme for capacity from Europe to South America and offer rates as high as $35 per kg.
For freight with margins that can't absorb those high costs, "many shippers are no doubt reviewing their mode mix and looking to shipping by ocean next year," Mr Galindo was quoted as saying in a report by New York's Air Cargo World.
Air cargo is expected to remain congested through to January 15. However, rates aren't expected to fall back down for long, as the Chinese New Year in mid-February will drive rates back up again.