Poor visibility marks airfreight market in 2019 as spot rates lead year
AVERAGE airfreight rates have been higher than last year in 2019, but poor visibility persists, says Peter Stallion of Freight Investor Services, reports London's Loadstar
AVERAGE airfreight rates have been higher than last year in 2019, but poor visibility persists, says Peter Stallion of Freight Investor Services, reports London's Loadstar.
Looking at the TAC Index, showing net price data from a basket of routes between China and Europe, he said: 'Typically this is a spot market period, however the behaviour in 2019 may suggest a market correction.'
Last year saw forwarders take up contracted space throughout the year, following the heady peak at the end of 2017, which saw demand easily outstrip capacity - at great cost to some shippers.
As a result, shippers moved volumes evenly, including in the weak summer period. This year, however, forwarders did not have a unified strategy, said Mr Stallion.
'Our market feedback sees a division between forwarders that have bought non-index linked block space agreements early, and now regret it, or can't fill it,' he said.
'Forwarders who are sitting on the spot market hope to secure BSAs [blocked space agreements] much later in the year and other forwarders look into series charters from August onwards on Asia-uS/EU.'
While that makes the market difficult to read, FIS believes volume is 'being bunched until later in the year, given the extra capacity supposedly available in peak season 2019'.