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Ocean carriers accused of being 'abusive', forcing shippers to use airfreight

'HELL on the high seas' has triggered a new rise in airfreight rates after a period of relative stability, say forwarders, with one of them calling shipping lines 'abusive', with a strategy that is sending shippers back to airfreight

22 November 2020 - 19:00

'HELL on the high seas' has triggered a new rise in airfreight rates after a period of relative stability, say forwarders, with one of them calling shipping lines 'abusive', with a strategy that is sending shippers back to airfreight.

'It's getting worse. Carriers are failing, neglecting customers, providing a sub-acceptable service and yet increasing rates daily. At least the airfreight sector is not being this abusive.'



One Shanghai forwarder, who said the country in terms of Covid was '95 per cent back to normal', claimed the market was getting busier, and 'airlines are starting to raise rates once again, after two weeks of being flat'.



'I think this is very affected by the current horrible sea and rail freight situation. We are seeing many sea freight customers switch to air, and many big order volumes are coming.'



He said shipping lines were cancelling confirmed bookings from the middle of this month.



'Shipping lines intend a US$1,000 per TEU increase from December, and are saying that no bookings can be confirmed.'



Rail freight from China to Europe is also struggling, he said, adding: 'You need to fight for just one container space.'



A spokesperson for DB Schenker predicted 'capacity will continue to be tight throughout December. If ??volumes are flipped back [to air] as a result of a very critical ocean situation, it could become a very heavy peak.'



A South-east Asia-based forwarder agreed that rates were on the rise and predicted the 'absolute peak' would be the first two-to-three weeks of December.



'Capacity from Asia to Europe is still relatively constrained, coupled with the increase demand this has led to airlines rejecting bookings or demanding a higher rate to uplift cargo,' he added.



Scheduled freighter operators are full and many have a backlog of cargo, he said. But charter space on ad hoc freighters is limited intra-Asia.



'They are not operating in this region as airlines are keeping their resources for ex-China, where the demand and freight rates are higher.'



'As rates go up, capacity appears to be rising too - but is 'overbooked, everywhere'.



'There are many charters, both pure freighter and passenger freighters in the market now,' said the Shanghai forwarder. And commercial airlines such as KLM, Qatar and Lufthansa are increasing the number and frequency, although many are already booked, reports UK's The Loadstar.


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