Demand for freight space is growing faster than has been the case in the last six years due to the global economic recovery and growth in consumer confidence, stocks are being increased. The enormous growth of eCommerce cargo strongly supports this. In addition, oil prices rose again in 2016 after the substantial decline in the end of 2014. Fuel costs are higher for airlines, and some of them have again introduced a ‘Fuel Surcharge’ after the airlines switched to all-in rates 2 years ago. Most airlines still hold the ‘all-in’ formula, but eventually they will want to charge the higher fuel costs.
Transport by airfreight is increasing, reports from companies as IATA are showing that the first 6 months of 2017 the demand for airfreight was the strongest since 2008. There is significantly higher demand for airfreight right now than earlier this year and during the Peak Season previous years.
We expect that this year the Peak Season will be back. Perhaps even earlier than in the past. Where it normally started in October we think that this year it might even start in September. Resulting in less available freight space and higher rates.
The market should take into account that the freight volume in 2017 is considerably higher than in 2016, 13.4% and 8.5% in March and April respectively. It is expected that this trend will continue throughout the year, with higher rates as a result. This is evidenced by analyzes from the International Air Transport Association (IATA).
In order to gain advantage of this situation you see that many airfreight carriers introduce an extra service on top of their standard service. Express, Special, Rush or any name you can think of is the name of the service they are selling for a (much) higher rate than the standard service. In case you select this service your booking will get a higher priority and therefor the change your cargo will be shipped on the booked flight will be higher.
Last minute dispatch strategy to combine all orders into one shipment to avoid the costs of sending out in multiple shipments can be dangerous in the Peak Season.
To secure space and to avoid the use of special services like ‘Express, Equation, Flash, etc… try to plan your shipments accordingly for the last months of this year.
Trust having you informed accordingly.
Legero Air & Sea Freight
Erwin van den Berg