Hong Kong air freight spiking

The pre-Christmas spike in eCommerce volumes out of China means that demand for air cargo space has risen 5%, driving rates up 11% from Hong Kong and China to the US and 9% to the UK.

Having anticipated no peak season, the demand picture has changed significantly in the past four to five weeks with massive eCommerce volumes driving up rates and producing a real end-of-year high.

There are currently between two to three thousand metric tons of eCommerce flying from South China and Hong Kong every day, with some consignments transferring to alternative despatch airports for destinations in the US and Europe.

The volumes coming out of China are very significant, but the bigger question is, how sustainable it is because the market is fundamentally weak and demand is more related to US and European consumers buying more lower-value products. 

With demand outpacing supply, the global dynamic load factor rose to 60%, based on volume and weight perspectives of cargo flown and capacity available, which is similar to the corresponding level of a year ago,

In a tight market, you only need a slight imbalance to impact rates and availability and capacity on the transpacific lane out of China is particularly tight. Some consignments are shipping first to Europe, then on to the US and with air freight rates spiking, Sea Air solutions are proving popular.

This summer, rates out of Asia were so low there was no cost advantage using Sea Air via Singapore, Dubai or Seoul, but now Sea Air is an effective alternative to direct air.

Rates from Vietnam are also strong currently, driven by good hi-tech volumes and increased demand for fashion goods, as well as some volumes being pushed from China into the Vietnamese market outbound.

Within the context of global macro-economics, with high interest rates and inflation, consumer purchasing power is down, and with the emphasis on saving money this eCommerce driven peak may last beyond Christmas and into Chinese New Year. 

We have solutions for every critical shipment, with extremely competitive rates and really interesting service and route combinations. 

EMAIL Colin Redman for insights, advice and rates.