Air Freight Hits Capacity. Ocean Rates Still Falling.
Last week was the first time in at least ten years that air cargo in Europe hit capacity. That saw some shippers paying sky-high air rates to get their shipment loaded.
According to Manel Galindo, CEO of Freightos WebCargo, “While ocean freight rates are still tanking, air freight is at peak capacity. For as far back as I can remember, all carriers maxed out on capacity in Europe. This triggered holiday-season auctions, with bookings bumped by the highest bidder. In one extraordinary case, I saw spot rates on a transatlantic route hit $13/kg. Prices have stabilized, but this frenzy may happen again in the run-up to Christmas.”
After Christmas, rates traditionally ease off before picking up again for the Chinese New Year. But with e-commerce growth fueling strong demand, expect prices to flatline in January instead.
Last week’s prediction that the ocean freight peak season had ended earlier than most years was spot on.
With no capacity issues on any lane, December 1’s GRIs are nowhere to be seen. Freightos Marketplace forwarders are either lowering rates or extending their November rates. With January’s traditional pre-Chinese New Year lull coming up, the key question now is, how much lower can 40’ prices actually drop?
Key Points By Lane
- Despite being well into peak season, China-US West Coast rates fell again this week (10% drop) and hit a new low for the year. They are currently tracking 40% behind last year’s rates.
- From $3,084 ( first full week of this year), China-US East Coast rates hit a new low of $1,613. That’s 36% behind where they were this time last year.
- Not affected by Thanksgiving, China-Europe rates have been relatively stable recently, but are nonetheless lagging 24% behind where they were this time last year.
- Space is no longer tight on the Europe-US East Coast lane, and rates fell accordingly (21% drop) this week. They are now a full 30% lower than last year’s rates.