In an effort to circumvent the ocean transportation congestion issues that continue to delay the imports from Asia, many shippers have shifted their focus to air freight. This unprecedented growth in the US air cargo import volumes has brought about significant congestion issues and the highest air freight rates in the history of the Trans-Pacific trade lane.
Troubled Waters Force Shippers to Look to the Sky for Help
More and more shippers are being forced out of the increasingly congested ocean freight market, where unyielding import demand has been severely constricting the supply chain for the last two years.
As vessels continue to gather outside of ports, waiting for their turn to finally unload, shippers grow frustrated. With schedule reliability seemingly being a thing of the past, more and more shippers are transitioning to air freight, especially auto parts and footwear importers.
Data shows that through January to October over 78 million kilos of auto parts flew across the Trans-Pacific trade lane, which is nearly 26 times more than the first 10 months of 2020. In contrast, auto parts transported via ocean only increased 35% year over year. During the same time, over 37 million kilos of footwear was imported via the air from Asia, a nearly 70% increase year over year. Meanwhile, footwear traveling via ocean only increased by 20% percent compared to 2020.
Air freight’s Sky-Rocketing Rates and Congestion Issues
International passenger flights have nearly come to a complete halt since the beginning of the global pandemic, dealing a devastating blow to an air freight industry who relies heavily on the belly cargo space on passenger flights. With the Omicron variant gaining traction and governments around the world implementing travel bans that have just recently been lifted, industry experts aren’t expecting an increase in air cargo capacity any time soon.
For regular air cargo shippers, this isn’t coming to them as a shock. They have been struggling to find space all year as most airlines have grounded their long-haul passenger flights which effectively removes half of the available air freight capacity.
Now with more demand from the holiday season and the pre–Lunar New Year surge yet to come, regular and new air freight shippers will not only have to find available space but also be able to pay the rising rates. In fact, air cargo rates on the Trans-Pacific Trade Lane are far above the levels reached during the medical equipment shipping frenzy of May 2020 and have risen 33% in the last four weeks.
Besides the capacity issues, many major airports are dealing with labor shortages which is also adding to the congestion. Many ground handling companies, as well as airlines, terminated workers throughout 2020 as passenger flights were cancelled. Attracting new workers into an industry that is anything but stable has also proved to be a constant challenge.
Whether you are shipping via Ocean or Air, ClearFreight is ready to help you find the best options to fit your shipping needs. We promise to be by your side along the way to help you navigate any hurdles that might come up. We have team members in both air and ocean freight standing ready to answer any questions or concerns you might have. Call us today to hear how we can make logistics easier for you.