Air freight expected to climb in mid-2022 due to shipping delays, DHL says
Bottlenecks and consumer spending stranded at home will help increase demand for air freight through mid-2022.
And with thousands of passenger jets, which typically carry around half of the world’s air freight, still stranded, capacity constraints will continue to push prices up, according to Tim Scharwath, managing director of DHL Global Forwarding, Freight.
“People are very willing to spend, they have more money left because they haven’t gone on vacation,” Scharwath said in an interview. Air cargo capacity “will also be scarce in 2022” as slow vaccine deployments in Asia will deter people from traveling, he said.
Air freight rates to North America from Hong Kong increased 24% this year after more than doubling in 2020 as the Covid-19 pandemic increased demand for electronics such as consoles computers and laptops as more and more people were forced to work from home. . The freight market has been a rare bright spot for Asian carriers such as Singapore Airlines Ltd. and Korean Air Lines Co., whose operations have been decimated by the pandemic.
Demand for air freight is increasing in the automotive and industrial industries as well as for plastics and chemicals, as companies restock as economies rebound faster than expected, Scharwath said.
Delays in shipping due to bottlenecks at ports and lack of containers have also diverted some goods, such as patio furniture, to airplanes, he said. Sea freight costs have increased, making air freight more competitive. The spot price of a 40-foot container to ship to Los Angeles from Shanghai has risen 34% this year, while Shanghai-Rotterdam rates have jumped 49%, according to the Drewry World Container Index.
Rail freight transport between China and Europe has also increased, with demand increasing 10% to 20% since last year, Scharwath said.
“We are now using the rail which is normally way too expensive, but because the ocean freight rates are so high, customers are demanding it,” Scharwath said. “If sea freight exceeds a certain threshold, rail becomes more attractive.”