NGL are advising all our shippers to book their Asia air freight shipments as early as possible to avoid a spike in prices and capacity shortages during what is anticipated to be another busy peak period.
We would usually expect the summer to be quieter, but this year has been an exception, as demand has outgrown capacity growth since the start of 2017 and is likely to continue for the rest of the year leading to a marked imbalance between supply and demand.
This imbalance in capacity is likely to be exacerbated if, as expected, the Far East peak season starts earlier and is stronger than last year’s.
China and Asia are expected to surge as the peak season starts to build ahead of China’s golden week which starts on October 2 and traditionally prompts a scramble by shippers to load cargo ahead of factory closures.
The Asia to North America air freight market is the strongest it has been for six to seven years and we are already experiencing tight belly-hold capacity, despite the airlines adding capacity for the summer season.
This additional US capacity will be phased out shortly, which will tighten supply and demand on these routes and may see US consigned cargo flying via Europe, placing even more demand on available capacity.
Our advice to all shippers is that it is in your best interest to book now, so that we can take precautionary actions to avoid capacity shortages, longer transit times, delays and additional costs.
Rates remain higher than 2016 and are very unlikely to soften for the time being.
As we approach peak season it is much more likely that airlines will want to increase rates for secured capacity, which is another good reason to make those bookings early.