As China's factories enter the Lunar New Year holiday, global air freight costs climb for the first time in seven weeks. The blockage of the Red Sea shipping lanes has forced enterprises to find higher-cost air transportation space, forming a new storm of the first chain.
The global chaos caused by the Red Sea crisis and the low water level of the Panama Canal has become a double test in the field of air freight. UPS CEO Carol Tome warned that the two are creating "serious chaos" as customers turn to air freight to avoid long voyages, leading to a gradual tightening of air freight space.
The Baltic Air Freight Index has reached 6 in the past week4%, ending a downward trend since mid-December. The TAC index reflects freight rates**,In line with the widespread expectation that freight rates could soar after the blockage of shipping in the Red Sea, and the arrival of the Chinese New Year is adding fuel to the fire.
The Chinese Lunar New Year will begin on February 10, and the factory will enter a long holiday, and customers are eager to quickly transfer orders before the holiday arrives. Freight carriers are competing for more space in air freight, and some customers are choosing all or part of their air cargo in advance to avoid delays.
Nick Frank, CEO of DHL Global Forwarding Asia Pacific, said that a peak of freight is expected before the Lunar New Year. Red Sea disruptions, extended ocean transit times, and ocean freight rates** are all driving customers to ramp up shipments ahead of schedule to ensure that inventory that was originally scheduled to ship is not impacted.
The air freight rate from Shanghai increased by 8 week-on-week8%, especially on routes to Europe. Air freight rates departing from Hong Kong and Southeast Asia are similar**, marking a general increase in freight rates worldwide.
Despite the Red Sea crisis that has caused a large number of container detours to Africa, shipping consultancy Drewry is optimistic about the global market**. They believe that spare capacity is sufficient to cope with the current crisis, while the surplus in the global market** provides greater resilience for shipping companies.
Drury believes that freight rates on the affected routes will remain high, but not high enough to trigger inflation. As the Red Sea diversion becomes part of the long-term planning of shipping lines, the pressure of capacity shortages will gradually ease.
The dual challenges of this global ** chain may be balanced in the adjustment of capacity. However, under the dual pressure of the Red Sea crisis and the Spring Festival, the ** chain will still experience a period of volatility.