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Air freight rates show little sign of a recovery in November and outlook is gloomy
LONDON-BASED shipping analysts Drewry in its latest 'Sea & Air Shipper Insight Report' found that all-in air freight 'buy rates' paid by forwarders to airlines for standard deferred airport-to-airport air freight services on 21 major East-West routes for cargoes above 1,000 kg had fallen.
This is contrary to previous predictions by Drewry analysts that air freight pricing would improve during the traditional pre-holiday airfreight rush in November.
Drewry's East-West Air Freight Price Index slipped 2.8 points month-on-month in November to a reading of 99.2, bringing to an end four consecutive months of rising prices, according to Lloyd's Loading List.
"Rates were expected to strengthen as November is normally the peak shipping month on the main Asia-origin routes, representing the finale to pre-Christmas peak season," said Drewry. "But weak demand has taken its toll on a depressed market.
"Compared to the same month last year the index is now a startling 22 points adrift, indicating the extent of underlying market weakness."
Drewry also forecast that 2016 would see another year of flat lining growth for the air freight industry due to poor trade expansion which would impact international shipment demand.
"Meanwhile, we expect air freight capacity to continue to expand through 2016, as increasing passenger demand drives supply of additional bellyhold capacity," added the report. "The combination of zero growth and rising capacity will put further pressure on already depressed freight rate levels."
This is contrary to previous predictions by Drewry analysts that air freight pricing would improve during the traditional pre-holiday airfreight rush in November.
Drewry's East-West Air Freight Price Index slipped 2.8 points month-on-month in November to a reading of 99.2, bringing to an end four consecutive months of rising prices, according to Lloyd's Loading List.
"Rates were expected to strengthen as November is normally the peak shipping month on the main Asia-origin routes, representing the finale to pre-Christmas peak season," said Drewry. "But weak demand has taken its toll on a depressed market.
"Compared to the same month last year the index is now a startling 22 points adrift, indicating the extent of underlying market weakness."
Drewry also forecast that 2016 would see another year of flat lining growth for the air freight industry due to poor trade expansion which would impact international shipment demand.
"Meanwhile, we expect air freight capacity to continue to expand through 2016, as increasing passenger demand drives supply of additional bellyhold capacity," added the report. "The combination of zero growth and rising capacity will put further pressure on already depressed freight rate levels."
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