The beginning of the airline summer season this month is expected to impact airfreight rates due to the increasing availability of belly capacity on passenger routes. Although major tradelanes have not seen significant changes, there are still areas with high volumes of airfreight, particularly in ex-India. Forwarders have noted that space in India origin airports and transhipment points remains congested, leading to increased rates and booking timelines of up to eight or nine days in advance.
Additionally, there is a backlog and congestion in key Indian cities like Chennai, Mumbai, Delhi, and Bengaluru, further exacerbating the capacity crunch. The decision by Air France and Etihad to reduce services in Chennai has also contributed to the challenges in that region. The dynamic load factor from India to Europe hit 87% in the week ending 24 March, the highest level since April 2022, with a shift in rate weight breaks observed.
Furthermore, there has been an increase in average spot rates, with sell rates from airlines rising significantly. Despite this, shippers are trying to negotiate and hold firm on their rates, resulting in a smaller rise in shipper rates compared to airline sell rates. In other regions, like Hong Kong, e-commerce continues to drive air cargo demand, with increasing concerns over high freight rates and potential economic sanctions.
South Africa has also seen a surge in inbound volumes, attributed to port congestion and disruptions in the Red Sea region. The air cargo market globally is experiencing rising rates, driven by disruptions in container shipping and increased demand for cross-border e-commerce shipments. Overall, the industry is facing various challenges and fluctuations in rates and capacity across different regions.
