Rates for Air Freight Rising Before Christmas

The average spot air freight rate from Asia to the US in October rose 49% from a year ago to $5.46 per kilogram, according to market analysis firm Xeneta. Air freight rates from Asia to Europe also rose 25% over the same period

Airlines on the Eve of Christmas

Airlines are racing to add more cargo flights from China to take advantage of sky-high freight rates ahead of the holiday shopping season, a sign that demand from foreign customers, especially from the US and Europe, for low-cost Chinese e-commerce goods is surging ahead of Christmas.

Cheap online products from Chinese e-commerce firms are gaining popularity in Western markets. Demand for air freight from Asia, notably China, is increasing as interruptions in maritime lanes in the Red Sea threaten to overload the already congested express delivery market ahead of the Christmas shopping season, driving up air freight rates.

The need for air transportation increases significantly

According to Xeneta, the main cause is an increase in air freight demand, which is being pushed by Chinese e-commerce giants competing to match Western consumers’ need for low-cost items.

Many Chinese e-commerce items are shipped directly to international customers via air, as the country’s online retailers take advantage of import duty exemptions for orders under a specific amount.

Rates for Air Freight Rising Before Christmas

Other explanations for the abrupt rise in air freight charges

Recently, Danish freight forwarder DSV warned that airlines may reallocate capacity from the United States and Europe to Asia in order to maximize earnings. This will result in a loss in air freight capacity between Europe and the United States, perhaps leading to major price rises.

Cathay Pacific’s freight chief, Tom Owen, declared 2024 the year of e-commerce, particularly from mainland China. He also stated that the Hong Kong-based airline intends to add more freighters, with more scheduled for delivery in 2027. DHL, a German transportation company, recently announced intentions to invest in eight new Boeing 777 freighters in anticipation of strong demand from China during the peak season. UPS, which runs more than 360 flights each day, announced that it will add 200 flights from Asia to Europe and the United States in the fourth quarter of 2024.