November 2021 Airfreight Update
By NNR USA In Uncategorised On 4th November 2021
The air freight cargo market is booming this peak season! Space remains tight.
The new policy allowing more foreigners to visit the U.S. is expected to bring more belly capacity back into the market.
According to IATA, cargo volumes will grow by 7.9% in 2021 compared to 2019.
In the U.S.
- We continue to see ongoing congestion through our main gateways LAX / ORD / JFK.
- We are in a spot market where carriers allocate a small amount of their space availability to Block Space Agreements and the remaining space is sold at a premium.
- Air freight surcharges are on the rise, Lufthansa recently published a $0.50/kg Airfreight Surcharge increase.
- Severe backlogs at origin and destination are affecting the supply chain as a whole.
Shanghai Pudong International Airport
- Flights canceled to North America causing rate increases.
- Cargo handling slow down due to COVID disinfection process.
- Crew will be quarantined if aircraft at terminals more than 6 hours.
Demand
- Global airfreight demand will return to 40% of the 2019 level this year.
- Strong regional Trans-Pacific - U.S. variations with carriers reporting strong demand in North America while other regions' demand is negative.
Capacity
- Capacity increased by 10% YTD, U.S. demand is rising since retailers are trying to find solutions to avoid port congestion.
- Top carriers are adding more freighter capacity but are facing operational challenges in Asia.
- Additional flights are creating operational challenges due to the COVID-19 outbreak in Asia.
- Trans-Atlantic route reopening should add extra capacity.
Tip-of-the-Month
- Commit long term with your freight forwarder to assure better stability and predictability in your supply chain.
- During peak season, the smartest way to secure air freight capacity is by using charter networks. Capacity is tight for late shoppers.
- Plan as early as possible and be prepared to make a swift decision to buy space before someone beats you to it!