Weekly Air Operations Update: Shanghai to Europe, US and Australia 11/08/23

Shanghai to London

• The market and air rates are currently stable
• Airport operations are currently normal
• Hauliers are working as normal
• No flight cancellations
• No weather disruptions
• Space is open
• Rates are relatively stable; airlines have provided promotional rates for dense cargo

Shanghai to New York

• Volume to East USA continues to increase and rates are at a high level due to a large launch of e-commerce goods
• Airport operations are currently normal
• Hauliers are working as normal
• No flight cancellations
• No weather disruptions
• Space is very tight
• Rates are increasing

Shanghai to Los Angeles

• The volume to West USA is expected to increase which will lead to the rates increasing
• Airport operations are currently normal
• Hauliers are working as normal
• No flight cancellations
• No weather disruptions
• Space is a little tight
• Rates expected to increase soon

Shanghai to Frankfurt

• The volume to FRA is stable
• Airport operations are currently normal
• Hauliers are working as normal
• No flight cancellations
• No weather disruptions
• Space is open
• Rates are stable

Shanghai to Melbourne

• Airport operations are currently normal
• Hauliers are working as normal
• No flight cancellations
• No weather disruptions
• Space is a little tight
• Air rates have increased slightly

Shanghai to Sydney

• Airport operations are currently normal
• Hauliers are working as normal
• No flight cancellations
• No weather disruptions
• Space is a little tight
• Air freight prices have increased slightly

Market intel

• Price war keeps air cargo rates down as forwarders misjudge market
  

  PESSIMISM is growing that a price war in air cargo is driving the market down beyond today's abysmal depths, reports New York's FreightWaves.

  Logistics professionals had hoped for an upturn by now that would steadily build into the second half, but that hasn't happened.

  Freight forwarders and, increasingly, cargo airlines have responded by chasing volumes without regard to cost, which observers say is accelerating a decline in rates, said the report.

  Aggressive discounting, and carriers shelving older aircraft, suggest that more companies say demand won't improve in a world of excess capacity.

  In fact, freight rates are lower than supply and demand fundamentals actually support because freight forwarders and carriers, eager to generate some cash from committed airlift, are undercutting each other on price to keep bookings and steal business, transport managers and analysts said.

  "There's a bit of a rat race going on in securing volumes that are not growing, combined with the increase in capacity," said Xeneta air freight chief Niall van de Wouw,

  "It makes for a toxic environment where we see irrational pricing both towards the shippers by the forwarders and forwarders from the airlines side," he said.

  Many forwarders feel squeezed by high air freight rates locked in with airlines under contracted space allocations while their own customers push for multi-month contract renewals based on rates at the new market level, according to Xeneta's latest update.

• N. China
  After the typhoon crisis, flights gradually resumed, market is depressed and freight rates declined.
  
  
• S. China
  Due to the limited capacity, the air rates of South China are still at high level.