In the world of airfreight, September brought some promising signs of recovery as rates on key Asia-outbound routes began to rise. However, this glimmer of hope comes with caution, as the industry still faces challenges related to supply, capacity, and economic uncertainties. The balticexchange source.
- Airfreight rates showed improvement in September, but caution prevails as rates are still below last year’s and early 2023 levels.
- Industry leaders FedEx and UPS are not anticipating a strong peak season, citing inflation and consumer spending constraints.
- The airfreight market’s future remains uncertain, with pricing expected to gradually rise but stay below previous-year levels amid various economic factors.
September’s Rate Surge
Airfreight rates on major Asia-outbound lanes saw a healthy increase in September, hinting at the possibility of a peak season in 2023. Notably, Hong Kong to North America and Shanghai to North America rates surged by 8% and 11%, respectively. Meanwhile, rates to Europe also saw significant upticks.
Reasons for Caution
While recent rate increases offer hope for a stabilizing market, caution is warranted. Rates still lag behind last year and early 2023 levels, and supply continues to enter the market. Increased capacity, rising fuel prices, and passenger belly capacity re-entering the market are factors that may continue to pressure pricing.
Industry Insights
Industry leaders FedEx and UPS have expressed skepticism about a peak season in 2023, with expectations of flat revenue. Inflationary pressure and rising energy costs, along with consumer discretionary spending constraints, make a significant restocking unlikely. Shippers are expected to remain conservative in their positioning.
Looking Ahead
As capacity and inventories gradually come into balance, air cargo rates will increasingly be influenced by core demand. While a modest sequential price increase is expected by year-end, rates are likely to remain well below last year’s levels. The path ahead remains uncertain, with various economic factors at play in the airfreight industry.
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Source-balticexchange
