Shippers urge against unsustainable price hikes as air freight rates rise

Air freight rates rose 4% month on month in March to $2.84 per kg, unusually for the time of year. While this is still significantly lower than two years ago, it is an improvement of 8% on last year’s slump.

Good volume in air freight has been attributed to rising semi-conductor sales, silicon materials sales, and firms using air freight in a rush to restock waning inventories.

Some forwarders have warned that shippers, who have been enjoying low air freight rates, will need to expect rising rates if demand continues to grow. However, this may prove difficult as shippers have become accustomed to lower pricing.

The European Shippers Council (ESC) has cautioned against unsustainable price hikes, stating that rising rates should respond appropriately to the market.

“In our view, sustainable rates are also stable rates that are fairly predictable and create a healthy market for all parties in the air cargo supply chain over the medium or longer term,” Rogier Spoel, policy manager for ESC, told The Loadstar.

“Price hikes are not seen as sustainable rates by shippers. Rates should develop in the same way of the economic development.”

Spoel also suggested that the market should retain some overcapacity in order to support growth and avoid overheating.

(Source: The Loadstar)