The freight is more expensive! Global air transport costs soar to an all-time high

Source: Wall Street

This kind of "trauma" is likely to be borne by consumers in the end.

Global freight costs have reached record levels as demand surges before Christmas, putting further pressure on an already tight supply chain.

Transport prices on key air cargo routes around the world have almost doubled in the past three months.

Last week,Air freight from Shanghai to North America reached $14 a kilogram for the first time, up from $8 at the end of August and above the historical record of $12 set at the time of the outbreak in early 2020.

Since the Biden administration announced that the United States will reopen its borders to foreign tourists, air freight prices between Frankfurt and North America have risen from $3.50 to $5.40 per kilogram.

Air freight prices on transatlantic routes from Hong Kong to Europe and the United States, as well as between Frankfurt and North America, also rose significantly, according to the Baltic Exchange Air Transport Index and TAC Freight, a provider of cargo data.

And the high efficiency of air transportation is irreplaceable. According to the Financial Times, Yngve Ruud, global head of air transportation at Kuehne+Nagel, one of the world's largest freight forwarders, said:

Ruud points out that even if transatlantic routes return to the state they were before the outbreak, it will not help because airlines have changed many of their planes from cargo to passengers and space capacity has been limited.

The dilemma of the aviation industry

The imbalance between supply and demand has been a difficult problem that has plagued the whole world since the epidemic.

The supply chain has been busy in the fourth quarter and the airline industry has been under a lot of pressure as demand surged during the Black Friday discount season and the Christmas holiday.

Due to the shortage of containers and congestion at the port, companies have turned to air transportation, and specialized air cargo companies such as FedEx Corp and DHL have also made up for some of the demand.

Half of all air cargo is usually carried by passenger aircraft, but many are grounded during outbreaks. Now, the new Omicron variant is also likely to exacerbate the problem and make transportation more chaotic: industry executives say that in response to the Omicron variant, Europe has also seen a frenzy of ordering coronavirus testing equipment and personal protective equipment.

Marco Bloemen, head of freight consulting at Accenture PLC's Seabury consulting firm, said capacity in the airline industry was still 13 per cent lower than in 2019.

Bloemen pointed out thatWhile there is a shortage on the supply side, demand has increased by 6 per cent, resulting in a gap of nearly 20 per cent between supply and demand.

Staff at East Midlands Airport, Britain's main cargo hub, expect to handle 470000 tons of cargo this fiscal year, up from 370000 tons before the outbreak.

　　Soaring air freight prices may eventually be transferred to consumers.

According to the Financial Times, Bharat Ahir, chief executive of supply chain consultancy 28one, said that as the supply chain is under great pressure, consumers will eventually feel the impact:

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