The Strategist

Air freight prices hit record highs

12/14/2021 - 07:59

According to the Financial Times, the cost of air freight on major routes has reached an all-time high. Last week, costs on routes from Shanghai to North America hit $14 per kg for the first time, according to the Baltic Exchange Airfreight Index and TAC Freight, which track airfreight prices.

Airfreight for that route was $8 per kilogram in August. As a result, the price has nearly doubled in just three months. On the route from Hong Kong to Europe and the United States, as well as the transatlantic route between Frankfurt and North America, a similar increase was observed.

Industry representatives report that a number of reasons contributed to the record airfreight pricing. There was a rise in demand for the coronavirus testing and personal protective equipment as the novel COVID-19 strain emerged, in addition to the usual increase in shipments in the fourth quarter owing to Christmas and the sales season.

Furthermore, providers are unable to export cargo by sea since the shipping industry has long faced a substantial lack of containers and cargo ships, which must also spend a large amount of time waiting for unloading in ports. Finally, during the pre-holiday season, passenger aircraft transported half of the cargo. However, many flights have been canceled as a result of the pandemic, and airlines now mostly operate on tourism routes rather than between key trade hubs.