Year ends on a high as airfreight rates exceed 2015 levels

The year appears to be ending on a positive note for the air cargo industry as November’s airfreight prices climbed above the corresponding period in 2015 for the first time this year.
The latest figures from consultant Drewry’s Sea & Air Shipper Insight show that in November all-in buy rates across 21 major east west routes reached a 2016 high of $3.35 per kg.
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It is only the second time this year the figure has breached the $3 per kg mark, but perhaps more importantly it is also the first time that the 2016 figure has exceeded the year ago level, when rates stood at $3.22 per kg.
Rates are expected to decline in December, but Drewry said early indications suggest pricing will remain stronger than last year.
“Anecdotally, while it sounds as if rates have come down slightly in December, carriers are saying rates are surprisingly high for the last week before Christmas – and even more surprisingly – that January is looking strong.”
Prices typically decline in December following the pre-Christmas rush. Figures then tend to stabilise at a lower level until July when the market starts to pick up as the industry heads back into the peak season.
The improvement in prices shouldn’t come as too much of a surprise as there has been a demand surge towards the end of the year.
A variety of reasons have been suggested for the improvement, including the launch of new mobile devices, the re-call of mobile devices, the collapse of shipping line Hanjin, the growth of e-commerce, the popularity of China’s Singles’ Day and Black Friday and Cyber Monday and shippers adopting a relaxed start to the year, resulting in a last minute rush.
November figures from US carriers also point towards continuing improvements in November. European airlines saw a slowing of demand growth in the month, but much of this is down to factors affecting individual airlines and is perhaps not reflective of the industry as a whole.
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