Making more money doing less less work. That’s air cargo in a nutshell. Volume is down from 2019, but yields are up.
Companies that need to move goods by air will need to increase their transportation budgets to get through the fourth quarter as low capacity ignites airfreight prices.
Price inflation has tapered off for many – not all – air cargo markets during the second half of August. Shippers shouldn’t get used to it.
Airfreight exports from China slowed a bit in mid-August, allowing shippers to take back a tiny bit of pricing before rates shoot up for the next few months in as retailers build inventory for the holidays.
Shipping by air got much more expensive when the coronavirus pandemic exploded in March. After moderating earlier this summer, another price spike is brewing.
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Shipping goods by air is expensive, especially on the biggest trade lines from China. Rates are much higher than normal for this time of year, but they are heading up more with no end in sight.
Atlas Air Worldwide’s big cargo planes have been in flying full tilt since the novel coronavirus metastasized in March. Combine that with high rates and you’ll understand why r revenue and profit grew so much in the second quarter.
Airfreight looks like a haven for some ocean shippers that can’t find reliable, affordable transportation, but it probably won’t be that way for long because more businesses will need to move goods by air in the coming months and there aren’t enough planes.
The global airfreight market contracted during the first six months of 2020, but airlines made much more money from cargo than last year, according to World ACD.
The air freight market appears saner in recent weeks, with less competition among shippers for transport services. But the shape of the recovery is anyone’s guess and a possible demand spike for face masks and surgical gowns could create a hyper-market again.
Face shields, gloves and hand sanitizer were yesterday’s hot airfreight product. Now the cool shipments that people need right away are yoga pants, bikes and hot tubs.
The airfreight market is a volatile conundrum. Overall, demand is down. But with few planes flying these days and everyone wanting a face mask, good luck finding affordable space for your shipment of auto parts or seafood.
The February downturn in air cargo volumes presages even worse performance in the coming months, according to analysts.
