{"id":390,"date":"2016-03-23T13:01:31","date_gmt":"2016-03-23T13:01:31","guid":{"rendered":"https:\/\/phoenixglobalgroup.com\/mi-katigoriopoiimeno\/unprecedented-market-conditions-bite-into-asia-eu-air-freight-rates\/"},"modified":"2024-02-27T09:45:52","modified_gmt":"2024-02-27T09:45:52","slug":"unprecedented-market-conditions-bite-into-asia-eu-air-freight-rates","status":"publish","type":"post","link":"https:\/\/phoenixglobalgroup.com\/el\/nea\/unprecedented-market-conditions-bite-into-asia-eu-air-freight-rates\/","title":{"rendered":"Unprecedented market conditions bite into Asia-EU air freight rates"},"content":{"rendered":"<div class=\"news-short\">\n<div class=\"news-short\">\n<div class=\"news-short\">\n<p>A perfect storm of slowing production, overcapacity, and a lack of \u2018hot\u2019 consumer must-haves is causing air freight rates to sink to some of the lowest levels seen in years.<br \/>\nData from China showed a 25.4% year-on-year slump in the value of the country\u2019s exports February, the sharpest fall since May 2009. \u201cI know it was Chinese new year, but this is unprecedented,\u201d said one forwarder.<\/p>\n<p>With some forwarders reporting that rates for sea freight on the westbound trade is now \u2018free\u2019, deferred air freight rates last week out of Shanghai to Europe were hovering at around the $1.90\/kg all-in mark. Cargolux was reportedly offering rates of $1.48\/kg via Chongqing. Guangzhou to Europe was seeing rates of about $2.40\/kg, while Hong Kong was hovering at the HK$11\/kg ++ mark, although some carriers were offering promotions.<\/p>\n<p>Airline security charges are rising \u2013 in some cases faster than the fuel surcharge declines \u2013 but \u201cair freight is on its knees\u201d, said one forwarding source.<br \/>\nThe market out of mainland China was expected to improve slightly this week, rising about $0.25\/kg, but Hong Kong remains in the doldrums.<\/p>\n<p>Meanwhile, MIQ Logistics was reporting that Shanghai\u2019s factories are preparing for partial \u2013 or complete \u2013 closure from June onwards in advance of the G20 summit in September in Hangzhou, apparently in an attempt to improve air quality.<\/p>\n<p>\u201cThere used to be a good run up to Easter and a three or four day backlog,\u201d said the forwarder. \u201cThis week is slightly better out of China, but we can still book a flight on the same day,\u201cIf exports are down 25%, that is a huge factor.\u201d<\/p>\n<p>He noted that out of Hong Kong next week the fuel surcharge has been dropped completely. \u201cAirlines are back to just the freight rate and security surcharge.\u201d<br \/>\nNot only is world trade slowing, but air freight\u2019s USP is being undermined. \u201cThe factories aren\u2019t busy, so there are no backlogs or delays \u2013 the root cause of needing air freight is not occurring,\u201d said a forwarder. \u201cAnd nothing is really trending \u2013 no iPhones, or whatever the latest toy is.\u201d<\/p>\n<p>Air freight traditionally relies on supply chain disruption or the latest consumer trends for high value items. Speaking in Berlin last week, head of air freight for Panalpina, Lucas Kuehner, said: \u201cWhatever is the next \u2018hot\u2019 thing will go on air freight. That has a lot to do with the value proposition.\u201d<\/p>\n<p>Last year was the first year that more laptops were transported by sea freight rather than air, according to Seabury data. \u201cImporters are getting slicker,\u201d said a senior European forwarder. \u201cThere\u2019s a focus on air freight \u2013 i.e. not to use it. And there are no new fads.\u201d<\/p>\n<p>Low demand is coupled with serious overcapacity \u2013 which is now blossoming out to non-hub airports as the Middle Eastern carriers push out ever more passenger destinations.<\/p>\n<p>\u201cThere is so much belly capacity now. No one does Blocked Space Agreements any more \u2013 it\u2019s all about the spot market. Airlines can\u2019t restrict capacity in the way that they used to.\u201d<\/p>\n<p>One UK forwarder added that the market was \u201cvery challenging\u201d.<\/p>\n<p>\u201cHow can I make $100 on one container, when the rate is $100? We used to make $300 to $400 on a container. It\u2019s the same amount of work, but with significantly less revenue.<\/p>\n<p>\u201cThere is misery wherever you go. Rates are really suppressed.\u201d<\/p>\n<p>Source:\u00a0<a href=\"http:\/\/theloadstar.co.uk\/unprecedented-market-conditions-bite-into-asia-eu-air-freight-rates\/\">http:\/\/theloadstar.co.uk\/unprecedented-market-conditions-bite-into-asia-eu-air-freight-rates\/<\/a><\/p>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>A perfect storm of slowing production, overcapacity, and a lack of \u2018hot\u2019 consumer must-haves is causing<span class=\"excerpt-hellip\"> [\u2026]<\/span><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[33],"class_list":["post-390","post","type-post","status-publish","format-standard","hentry","category-nea","tag-2016-el"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Unprecedented market conditions bite into Asia-EU air freight rates - 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