Expect to see a surge in demand when once the lockdowns ease in China. How the freight forwarder think.
Airfreight rates have started to climb in the past week on routes to Europe (up 7.7%) and the US (up 8.4%), according to the TAC Index, but demand remains sluggish.
“Currently, there is not much cargo demand ex-Asia to Europe, in all honesty,” According to some of the European forwarder.
The lockdown in Shanghai has reduced production and caused delays in the local transport element. I expect once the lockdown is lifted there will be a surge in demand, especially as manufacturers try to clear their backlog of orders.
A major backlog of cargo is waiting for China to open up again, and when that moment arrives, spot rates out of China will rebound sharply. No one is giving any long-term contract rates at current levels – it would be foolish, when we know the market will bounce soon.
Current rates for sea-air LCL are about $4.50 per chargeable kg all-in out of Asia, arriving in Europe by air, while for FCL, the rate is about $3.80 to $4. He added that rates were higher to smaller European airports.
“Vessel delays in China are creating gaps in sailings from Singapore, and 13 days from Cambodia and Vietnam to Europe is now a dream. Currently the average transit time is 17 days. We are also seeing some infrequent destinations, such as Canada.”
Meanwhile, news that the EU authorities are putting a stop to cargo-in-cabins after 31 July has been tempered by expected increases in belly traffic.
Belly capacity does appear to be increasing, therefore if the trend continues we are optimistic that the passenger freighters being removed from the market should not have too much of an impact,” said one forwarder.
Source: various media & www.theloadstar.com