The Asia peak season for sea and air cargo that began in September is the strongest since the 2008 financial crisis, with the pre-Christmas air rush showing no sign of slowing down until after the Chinese New Year, which would stretch the peak out to five months.

2016 closed with air freight rates – particularly from Asia – rising strongly and space tight.

With over 40 millions flights every year and rates fluctuating constantly, global air freight is incredibly dynamic, which is why we work hard to keep you informed of market developments and maintain a team of dedicated personnel – to look after you and add that personal touch – which is why we are pleased to welcome the newest member of our commercial team, Martin Steel.

With two decades senior executive experience on the USA trade Martin has the knowledge and contacts to get the best deals and service for all your USA/UK consignments, so get in touch directly to discuss your requirements – Martin.Steel@norman.co.uk

European airfreight from Asia saw good growth in December after five months of contraction. Overall volumes are still below normal seasonal levels but have seen massive improvement, helped by peak imports from Asia, which rose to their highest level in 21 months), as well as exports to Asia.

Volumes on U.S. inbound and outbound lanes did not fare quite as well, dropping slightly from November’s levels, but the outlook for the first two quarters are looking more optimistic for U.S. lanes.

Demand for space is extremely strong from China, Hong Kong and Vietnam, with backlogs of up to four or five days at primary gateways like Shanghai, Beijing and Hong Kong.

There has been some backlogs developing for export cargo to Asia, but the effects are limited and are currently resolving quickly.

Airlines have introduced additional capacity where they can, but in some cases infrastructure restrictions pose a challenge, which means the additional capacity cannot be deployed, which worsens the bottleneck.
hkg-airport
Demand for air freight has been exacerbated by the ‘Hanjin effect’, with ocean freight switching to air to meet Christmas deadlines and large volumes of manufactured and eCommerce products that drove rates up sharply at the end of 2016.

These high volumes combined with the Chinese aviation authority’s decision to restrict additional flight operations ex-Shanghai and Hong Kong restricting the access of additional flights during implementation of a new air traffic control system has produced a knock-on effect from other Asian hubs such as Singapore, Tokyo, Seoul and Taipei.

The 2016 peak season triggered significantly higher ex-Asia spot market rates compared to 2015 with increases of 30% on many routes.

January and February are traditionally slow months and it’s too early to say how far the current peak will extend into the first quarter, but we do anticipate market growth in the first half of 2017.

It is likely that as demand slows in the first quarter the carriers will start to reduce the volume they’ve added currently, which typically leads to a repeat of backlogs and higher rates in the short term. This is a market dynamic that we have observed for years and work hard to protect our customers from.