Freighters seek air cargo back-up amid Red Sea shipping crisis
Red Sea shipping force them to find alternate routes, logistics firms say, a potential boon for a sector dealing with muted post-pandemic demand and overcapacity.
The Red Sea, which leads to the Suez canal, lies on the key east-west trade route from Asia's manufacturing hubs to Europe and onto the east coast of the Americas. About 12% of world shipping traffic accesses the Suez Canal via its waters.
But more than two months of attacks by Yemen's Houthi militia on ships in the region have affected companies and alarmed major powers in an escalation of Israel's war with Palestinian Hamas militants in Gaza.
While air freight prices have so far remained relatively stable as the shipping crisis coincides with a seasonal lull in demand, data from freight booker Freightos showed rates on a China-to-Europe route had surged 91% week-on-week on Sunday.
Price reporting agency TAC Index also said there were signs of an uptick in China-to-Europe air freight rates this week.
«We are talking to many customers already about increased air capacity,» said Yngve Ruud, head of Air Logistics at global logistics firm Kuhne+Nagel. «We have probably 20-30% more discussions and proposals than usual in January.»
Air freight is costly compared to sea freight, and not competitive for bulky, low-margin items. Such constraints have limited air cargo to less than 1% of global trade by volume, according to airline industry association IATA.
But since the attacks, which have forced shippers to take costlier routes that can add weeks to delivery times, air freight has become a more attractive option.
Korean Air Cargo, one of the world's largest carriers by volume, said it was starting to
