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Airfreight rates edge up in September

Airfreight rates edged up in September as the air cargo market headed towards its fourth-quarter peak season. Figures from data provider TAC Index show that rates on two key trade lanes - Hong Kong-North America and Hong Kong-Europe - both increased during the month. Average rates - combined spot and contract prices - paid by forwarders from Hong Kong to North America increased slightly to $7.02 per kg during the month compared with $6.98 per kg in August. From Hong Kong to Europe, there was an increase from $4.58 per kg to $4.80 per kg. The increases reflect the start of a gradual increase in demand at this time of year as companies start to add to their inventories ahead of the fourth-quarter peak season. Compared with last year, rates from Hong Kong to North America were up 31% while from Hong Kong to Europe they were up 8.8%. The higher rates than a year ago reflect higher jet fuel prices as a result of the Middle East conflict. Rates to North America grew ahead of those to Europe as AI-related infrastructure demand has boomed to the US this year. Meanwhile, volumes from Asia to Europe have come under pressure due to the European Union's introduction of a charge of €3 per package for shipments valued at less than €150, targeting e-commerce. Early data for the first few days of October appears to show that the rate increase accelerated as the fourth quarter got underway and ahead of the Golden Week celebration in China that runs from 1 to 7 October. The global Baltic Air Freight Index calculated by TAC jumped by 5% over seven days to October 5, leaving it up 25.5% from 12 months earlier. Rates are higher than a year-ago due to the US-Iran conflict and the impact on jet fuel prices, as well as buoyant demand on certain trade routes fuelled by data centre-related volumes. "That sort of jump was not unexpected after rates had been edging up slightly throughout September, but far from keeping pace yet with surging jet fuel prices," TAC said, pointing out that jet fuel prices are up more than 100% year on year. The index of outbound routes from Hong Kong last week rose 3% week on week to leave it ahead by 22.3% year on year, TAC said in its weekly market update. Outbound Shanghai gained 2.2% week on week to leave it at 18.3% year on year. "Rates elsewhere out of East Asia were more mixed, with gains week on week out of Japan and Seoul - but falls on lanes from Taiwan," TAC said. "Likewise out of Southeast Asia, with gains from Vietnam - though not on lanes from Hanoi to Europe - and falls on lanes from Bangkok. BAI Spot from India was also falling back slightly over the week - though overall rates from India were a little higher again."

Pressure on India-US trades as Colombo becomes a transhipment hot-spot

Colombo's increasing popularity as a transhipment hub is heaping cost pressure onto forwarders and shippers on the India-US tradelane, the Sri Lankan gateway's newfound revenue stream having provoked a worsening tide of congestion. Recognising India is facing its own congestion issues, particularly at Mundra and Nhava Sheva, CH Robinson said Colombo's status as a transhipment hot-spot was elevating the risks of rolled cargo. "When mainline services omit Colombo to recover schedules, South India cargo can miss planned connections even when space is available on the onward vessel. That distinction is particularly important for Tuticorin, Cochin, and Chennai cargo routed through Colombo. "In these markets, available main-vessel slots are only one part of the capacity equation. Feeder timing, container availability, dwell time during transhipping, and whether the mainline vessel makes its planned Colombo port call determine whether the container can use space," it said. Consequently, the forwarder warned, the issue cargo owners were being left to grapple with was not just whether they could secure allocations, but whether the feeder and mainline connections on these routings would hold together. Much of the congestion Colombo is contending with is a consequence of vessels and services routing away from their traditional transhipment hubs in the Middle East, amid the war between the US and Iran - a situation that seems to have affected US consumers most. This week, Hapag-Lloyd warned customers of waits of two-to-three days over the next few weeks, "due to yard density of more than 130% of all terminals and bad weather impacts". Sources are divided, some telling reporters the issue was "easing", others that they expect the problem to persist well into October before any improvement, with Exporters Association of Sri Lanka chair Nalaka Ratnayaka adding: "There is no workable solution yet." The increases have been marked; in August alone, Colombo experienced a 7.8% year-on-year uptick in transhipment cargo, which now accounts for more than 82% of its throughput, with turnaround times surpassing the six-day mark across multiple terminals. However, there have been some winners; the likes of Hambantota and India's Vizhinjam getting in on the transhipment act as carriers seek alternatives to satiate the demands being placed on regional supply chains.

Colombia 'absolutely booming', as ecommerce squeezes air cargo capacity

A huge rise in Colombia's ecommerce imports are putting pressure on inbound air cargo capacity, with airlines and operators reporting thousands of tonnes arriving each week and demand for space continuing to grow. "Colombia is absolutely booming," said one airfreight wholesaler that specialises in perishables. "It's incredible the amount of business going into Colombia." The wholesaler estimated weekly ecommerce imports at 3,000 to 4,000 tonnes - a figure supported by LATAM Cargo's market intelligence. He said one customer currently moving around 1,000 tonnes a week wanted to double that volume, but all available capacity was being taken immediately. LATAM's own imported ecommerce volumes on the US-Colombia corridor rose 53% in January-August. compared with the same period last year. Simón Benzaquen, North America sales VP at LATAM Cargo Group, told The Loadstar: "This strong performance was driven by an increase in operational frequencies into Bogotá, combined with the development and expansion of new regional destinations to streamline delivery times for end consumers." Meanwhile, figures supplied by analytics company Rotate indicate that ecommerce demand is growing faster than available capacity. In its latest three-month comparison with the preceding period, Rotate recorded a 16.8% increase in ecommerce demand into Colombia, while overall cargo demand rose 1.1%. Capacity declined 6.7%. Against the equivalent three-month period last year, ecommerce demand increased 11.9%, overall demand rose 5.7% and capacity grew 4.7%. The figures suggest a tightening market for inbound space, particularly for parcel traffic. The wholesaler described a trade that pairs southbound ecommerce with northbound perishables, and said Colombia had become a recurring topic among industry contacts at the recent European cross-border ecommerce event in Liege. "Everybody I spoke to there was talking about Colombia, Colombia, Colombia," he said. LATAM estimates approximately 99% of Colombia's ecommerce import tonnage enters through Bogotá, Medellín, Cali, and Barranquilla. Its market intelligence indicates cross-border ecommerce demand has been growing at approximately 5% month on month this year. Mr Benzaquen said LATAM was developing direct import services into regional gateways to shorten delivery times and improve network efficiency. However, suggestions that the Colombian surge could partly reflect shipments being redirected to neighbouring markets remain unconfirmed. The wholesaler questioned whether some imports might be travelling onwards, to Venezuela or Brazil. LATAM, by contrast, said the import volumes it processed into Bogotá were intended for Colombian consumers. The airline also said it maintained direct access to Venezuela during the temporary disruption to its Caracas service, using recovery flights into Valencia rather than routing those shipments through Colombia. Those flights carried more than 180 tonnes of ecommerce cargo during the interruption. LATAM offers more than 100 tonnes of weekly capacity across Caracas and Valencia, which Mr Benzaquen said fully met current demand. A second weekly Miami-Caracas frequency is scheduled to begin in November, taking capacity above 150 tonnes.