Buckle Up: Air Freight Rates Are Skyrocketing
It is hard to believe that if the global container crisis wasn’t enough to contend with, now buyers are being laden with skyrocketing air freight rates due to the unprecedented demand and limited supply. In the last week alone, rates have jumped 10%, with higher percentages expected on lanes originating from China and Europe.
The Culprit: Huge Demand vs Limited Supply
With ocean containers in short supply, many buyers and manufacturers are leaning on air freight capacity to help deliver goods to North America. If you are unfamiliar with the current container crisis, here is a synopsis. In the simplest of explanations, there is an uneven distribution of empty containers at shipping and destination points, putting a strain on ship availability.
Adding to this issue is the global fight against Covid-19. Flights at as many as 15 Asian Airports are being cancelled for various reasons related to the global pandemic including staff shortages, Covid-19 outbreaks and dwindling landing permissions. In an effort to combat the spread, some air employers have staff on a rotation of work, self-isolation and off-duty time, resulting in a pilot shortage as well as the loss of half the workforce at any given time.
Air freight is also being gobbled up by large volume buyers, leaving smaller ad-hoc shippers in a lurch.
With no end in sight, many companies are scrambling to find ways to get their product transported, and are using air laneways to do it.
Increasing Costs To Be Expected
Typically, seasonal air freight rates are approximately $3 to $4 per kilogram. These costs are expected to climb with retail stores shelves lacking in abundance, and the busiest shopping season right around the corner. Peak Season Surcharges are also looming and it is expected that costs may spike over $10 per kilogram. Even with these increased rates, air freight may still be a more advantageous option to ensure your goods arrive on time and get to your customers.