Transpacific air freight markets gathered further steam this week as port and hinterland chaos on the U.S. West Coast showed no sign of resolution, according to a survey of leading executives conducted by Flying Typers.
     One air cargo forwarding VP who asked not to be named said both demand and spot rates from major Asian hubs had been on “a steep” upward curve while a run on aircraft capacity for the last two weeks had seen charter rates surge.
     David G. Ross, (right) Managing Director of the Stifel Transportation & Logistics Research Group, predicted current chaos at U.S. ports would continue to hike costs for shippers. “The bottom line, in our view, is that domestic freight rates as well as trans-Pacific airfreight rates near term should increase with congestion-driven supply shortages, benefiting providers of logistics services and expedited delivery, while retailers and consumers should bear the burden of these higher costs,” he said.
     Li Wenjun, Head of Air Freight, DHL Global Forwarding Asia Pacific, said DHL had secured additional air freight capacity on all major trade lanes into the U.S. and had also received a number of requests from customers seeking air chartering solutions for cargo usually shipped by sea. “We expect air freight volumes to grow as more shipments are being diverted from ocean freight due to US port congestion and delays,” he added.
     Robert van de Weg, (left) Senior Vice President Sales & Marketing, AirBridgeCargo, said delays at Long Beach and other West Coast ports, and the perceived threat of a complete strike, had boosted airfreight to the USA during November. However, although AirBridgeCargo has allocated extra capacity and been performing additional flights into U.S. markets, he said shippers were not acting out of desperation.
     “Many shippers did not want to take a risk, it seems, to reach the market before Thanksgiving,” he said. “At the same time, there is no complete panic and things are not moving at any cost.
     “We expect the peak situation to moderate after Thanksgiving days - unless the labor situation worsens of course."
     U.S. retailers have been managing the threat of slowdowns and closures of West Coast ports for much of the year. This included shipping early or via alternate ports and using air freight as a last resort.
     “The current congestion issues are impacting the delivery of last minute hot holiday merchandise, replenishment inventory as well as early spring merchandise,” said Jonathan Gold, (right) National Retail Federation Vice President for Supply Chain and Customs Policy.
     “Retailers are doing everything they can to ensure that products will be on the store shelves for the busy holiday shopping season.”
     With little sign that port congestion will ease even after the holiday season, DHL has told its major clients to take three strategic steps to ensure future deliveries are not also disrupted. “First, use multiple carriers who can provide multiple port options,” said David Goldberg, (left) Head of Ocean Freight, DHL Global Forwarding Asia Pacific. “By spreading out the traffic we can isolate delays and maintain a fairly consistent delivery schedule.
     “Second, maintain an option through the Canadian Gateways and East Coast. Having an existing footprint on those services will allow for some cargo to move without too much delay.
     “Lastly, they should have access to critical material at origin in case they would need to replace cargo on the water which could move via air.”
SkyKing