With the upcoming holiday season and the ongoing modal shift from ocean transport to air, the cost of air shipments has been on a steady rise. As per the Baltic Exchange Airfreight Index (BAI), last week’s prices on freight services from Hong Kong to North America had reached USD 11.22 per kg, almost 23% higher than that in the starting of October and highest ever on the BAI. Similarly, fright travelling from Hong Kong to Europe is USD 7.80 per kg which is also relatively inflated.
On the other hand, the Freightos Air Freight Index revealed the airfreight rates from Asia/China to West Coast of US reached USD 14.22 per kg and those for East Coast of US reached USD 12.76 per kg. In its weekly market wrap up, Freightos said that with the holidays nearing and ocean delays pushing some shipments to air, peak season air cargo rates have continued to climb.
Apart from the already greater transit time, further delays at major ocean shipping ports are a reason for service users to opt for air freight to get shipments delivered in time for the Christmas shopping season. Christmas is just a little more than a month away and anyone wanting to ship from China to the US will not take the risk of transporting via ocean as it takes 20-30 days.
China International Import Expo was held from 5th to 10th November in Shanghai which was another reason for some airlines to cancel scheduled freighter and PAX freighter services during this period, while shippers continued to push out cargo. This induced a subsequent delay of 3-5 days in transit time.