Global Air Freight Rates Rose for the First Time in Seven Weeks
Global air freight rates rose for the first time in seven weeks ahead of the Lunar New Year in Asia.
Because tensions in the Red Sea pushed companies to turn into more expensive air freight to secure shipments.
The Baltic Air Freight Index, which shows weekly spot rates for general cargo across a number of routes, rose 6.4% in the week to Monday.
Reversing declines since the seasonal peak in mid-December.
The Tensions in the Red Sea Forced Shippers to Adopt Longer Routes.
The Baltic Air Freight Index said:
“The increase is in line with expectations that rates may rise after the disruption to shipping in the Red Sea.
Although sources also point out that rates often rise in the period leading up to the Chinese New Year.”
Many factories in China close for the eight-day holiday, which begins this year on February 10.
While companies are looking to get inventory to customers before then.
Air freight rates from Shanghai rose 8.8% on a weekly basis, driven by large increases to Europe.
While Air freight rates outside Hong Kong also rose 5.9% and air freight rates outside Southeast Asia jumped 10%.
The Red Sea leads to the Suez Canal.
It also lies on the main trade route between East and West, from manufacturing centers in Asia to Europe and then to the east coast of the Americas.
Shipping Goods Entirely or Partially by Air to Avoid Delays.
In recent weeks, shippers have turned more to air freight and some customers have begun to ship goods entirely or partially by air to avoid delays.
However, air freight rates have remained relatively stable due to the overlap of the shipping crisis with the post-Christmas lull in demand.
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Global air freight rates have been on a downward trend since early 2022 from their all-time highs during the pandemic.
The Baltic Air Freight Index has fallen by around 24% year-on-year.
According to data from the International Air Transport Association (IATA), air freight, which is more expensive than sea freight, accounts for less than one percent of global trade by volume.
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