Record air freight rates recorded on ex-China routes
Air freight rates out of China are at their highest levels ever as massive global demand for personal protective equipment (PPE) from countries battling the coronavirus disease 2019 (COVID-19) continues unabated.
The demand is so strong from Europe and the United States that Chinese factories manufacturing the vital medical equipment will remain through the May 1-5 Labor Day holidays, forwarders have told JOC.com.
On top of the sustained heavy demand for PPE, available cargo space has been drastically reduced with the continued suspension of passenger flights on both the China-Europe and trans-Pacific trades, leading to a market environment Freight Investor Services (FIS) has described as “mayhem.”
“The air freight market sits atop ballooning demand for medical equipment at eye-watering markups being absorbed by -users — governments,”.
“The emergency supplies are driving the market and the ter prices in a way I have never seen before,” said xxx. He told JOC.com that air freight rates, particularly from South China, were at their highest-ever levels and demand was so strong he was having to find capacity from several sources.
“Next week looks like the busiest week we have had so far, mainly for PPE,” said xxx. “We have eight ters confirmed and a lot of other cargo on commercial capacity, and besides our regular capacity, we are buying extra capacity as well.”
Markets going crazy
xxx said air freight and PPE demand out of China was “currently going crazy” in a highly volatile market.
xxx is predicting peak demand for air freight in the next week ahead of the Labor Day holidays.
“We do expect that some factories will work through the holiday or only shut down for part of the period,” “However, we also expect there to be significant closures still, which adds to the rush around air freight.”
How long the heavy demand for PPE will continue to drive the air freight deps on when coronavirus infections to decline in the major markets of Europe and the US.
xxx is expecting demand for air cargo to slow when stocks of masks and PPE become available in Europe, with shipments shifting from air to rail and even sea freight, although there was little certainty around when that would happen.
“At this stage, with few no exceptions, the booking and demand visibility we have is two to three weeks maximum,” he said. “Ultimately, these urgent air freight shipments will become less and less and will then stop. My personal guess is that this will start happening more and more during the month of May.”