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Freight Rate Increases

Airfreight rates from key Asian hubs continued to climb last week as ocean capacity shortages and personal protective equipment shipments pick up.

The latest figures from TAC Index show that average airfreight rates from Hong Kong to South Africa last week climbed for the fourth week in a row as they increased by 4.6% week on week.

From Shanghai to South Africa average prices increased for the second week in a row as they jumped by 10.2% a week earlier.

From Hong Kong to Europe there was a 1.5% decline, however from Shanghai to Europe there was a 14.8% increase.

Rates into South Africa continue to track ahead of last year’s levels, but they are down on the high levels recorded in April & May.

Eytan Buchman of Pioneer Freight rate supported portal Freightos, said that ocean capacity shortages could be having an impact on the market.

“The high rates and additional lead time to ship by ocean are pushing some time-sensitive shippers from ocean to air, contributing — together with the increase in personal protective equipment demand and peak season electronics — to the recent increase in air rates.”

Electronic product launches are beginning to affect the market, along with an uncertain capacity outlook.

In fundamental terms we are still looking down the barrel of various airfreight-centric product launches that correlate with a bullish viewpoint. However, capacity remains highly uncertain, linked to passenger traffic inconsistencies.

The market appears to be pricing about 25% above its 2019 level for the time being. What is more of a concern for shippers, is a new and persistent requirement to absorb both the higher airfreight rates and direct market volatility.

Due to the ongoing high demand for space, capacity will more than likely remain tight for the remainder of the year.

For any Airfreight enquiries, whether import, export or cross-trade, Pioneer Freight is at close hand to seek the best possible pricing, matched with service.