Since a previously issued air market advisory, TOC regrets to announce that the air market has continued to deteriorate for the forwarding and client community in terms of available space and pricing. Economy rates are currently not being offered and standard rates are now at formerly priority levels and are only “space available.” Further, obtaining lift within any 5-10-day period is requiring FLASH level service at rates never before seen. From Europe, rates are running between $7 – $10.00 per kg; from Asia, getting lift within 3-5 days, rates are running $15 – $20.00 per kg.
In a switch from historical pricing schemes, TOC has experienced a situation where the heavier the cargo, the more expensive the rate per kg.
According to Alex Lennane of The Loadstar, “Forwarders and shippers are “feeling the pain” of a serious lack of air freight capacity in the market as rates soar on some lanes as high as $8.00 per kg.” In the same article, one Asia-Europe freight forwarder reported a seven-to-ten day backlog out of Asia. It has also been reported that scheduled airlines are pulling freighter flights to operate charters, booked up by big names for product launches. One source indicated that Coca-Cola alone operated 12 charters last week from Ireland to the US, while Samsung, Apple and Amazon are also thought to have booked significant amounts of capacity.
This means many things for TOC and our customers and customers should be aware that Standard Air Rates, while being offered by the airlines, are only being honored for “space available” conditions; the reality of these “space available” conditions means cargo sits for days or weeks until space frees up, and the users are not able to rely on transit day expectations. In order to achieve space, even with Priority service, bookings are being demanded 5 days in advance, and then the lift might not be granted for 2-3 days longer. In China, some airlines have now placed an embargo on freight from China to US and Europe; meaning they are not accepting any new bookings, period.
TOC recommends that customers are very clear when requesting quotes/service via AIR on a required delivery date and earliest ready for a pickup date.
Customers should also:
- Be accurate on pallet dims, weights and commodity descriptions, don’t estimate.
- Note that if you require internal pre-approval for any quotes TOC provides, please understand that this means we cannot book the shipment without your formal approval, thus extending the number of days before we make the advance booking, and potentially extending the transit days.
- Expect TOC Logistics to quote an AIR move based on the required delivery date, which in today’s market means Priority or Flash level, unless you specify Standard service and the ability to live with “space available” conditions
TOC is happy to offer both Standard and Priority options in our quotes, for your decision-making process and customers should be sure to specify this on their request.