Finance Association, April 7 (Editor: Xiaoxiang) Every year at the beginning of the year and after the Lunar New Year, it is often a low season for the air cargo market. However, this year, as retailers and manufacturers around the world switched to using air cargo to transport more goods during the Red Sea crisis, the global air cargo market is experiencing a rare “off-season explosion”!

Industry experts said that this phenomenon is mainly due to European importers seeking to avoid shipping delays. Due to the Houthis attack in Yemen, shipping in the Red Sea was blocked, and a large number of container freighters passing through Europe and Asia are having to avoid the Suez Canal and instead detour from Africa, causing extensive delays in the shipping market. In this context, the sharp increase in demand for alternative air transportation also gave many international air carriers a boost during the low season in the original industry.

Niall van de Wouw, chief air transport officer at transport data company Xeneta, said that during the traditional low season for air freight, this demand is driving “the air transport market to be surprisingly busy.”

The Norway-based company said that in the past four months up to March, global air traffic has shown double-digit growth. There are signs that demand for trade routes affected by the Red Sea crisis is particularly strong.

Data provider WorldACD also said that since the beginning of this year, Asian-European air hubs such as Dubai, Bangkok, and Colombo in Sri Lanka have been particularly busy, and cargo volume from Dubai to Europe has doubled in recent weeks compared to a year ago.

The International Air Transport Association said that trade between the Middle East and Europe was the fastest growing global air transport market in February, up 39.3% over the same period last year.

In stark contrast to this, according to data from the International Monetary Fund (IMF), the number of merchant ships passing through the Suez Canal in the first quarter of this year dropped by 45% compared to a year ago as Western freighters in the Red Sea continued to be targeted by the Houthis.

Freight prices are rising and shipping is high

Generally speaking, the cost of air freight is much higher than shipping, but today, many companies are no longer concerned with calculating these additional costs — speed of delivery is becoming critical for them, especially now that shipping freighters take 10 days longer to bypass the Cape of Good Hope in South Africa than go straight through the Suez Canal.

Extending flight range has posed challenges to some companies that rely on seasonal products and critical components. Manufacturers, including Tesla and Volvo, suspended production at some car plants in January due to a shortage of parts.

Brian Bourke, chief commercial officer of Seko Logistics, a freight forwarding company headquartered in Schaumburg, Illinois, said that manufacturers in particular are beginning to shift those high-priority goods from sea to air to meet production plans and keep the plant running normally.

According to industry statistics, on routes connecting the Middle East and South Asia to Europe, the average spot air freight price from February to March rose 46% to 2.82 US dollars per kilogram, up 71% from the same period last year. In March, the average global spot freight price for air cargo rose 7% from the previous month to $2.43 per kilogram.

Xeneta's chief air cargo officer said: “Obstruction of Red Sea shipping is clearly a major factor in this change.”

In addition to this, strong transportation demand from growing e-commerce companies such as Temu and Xiyin from Asia has also caused air freight prices to continue to rise.

Asok Kumar, executive vice president of global air cargo at a German freight forwarding company, said, “We expect this growth in transportation demand to continue.”

Editor/Somer