Air freight costs predicted to rise as trade 'ramps up'

Will Green is news editor of Supply Management
18 November 2014

Air freight prices between Asia and Europe are expected to rise towards the end of the year following a period of stable rates, according to shipping consultancy Drewry.

In September the Drewry East-West Air Freight Price Index hit $3.36/kg (£2.15), up 3.7 per cent year-on-year and continuing a run of four months where the price has hovered just above the $3.30/kg (£2.11) mark.

Drewry said it had anticipated a bigger rise in September following the launch of new consumer electronics products.

Simon Heaney, senior manager of supply chain research at Drewry, said: “Given the anticipated tailwinds from new product launches through September, the sluggish expansion in the index suggests some softening in underlying demand relative to capacity.

“However, we expect pricing to rise on key origin Asian routes into North America and Europe as the trade ramps up for end-of-year peak season.

“In the short term, Drewry expects capacity availability to tighten through peak season by comparison with recent years. However, as the trade moves into next year the outlook appears more uncertain, with overall trade growth expected to slow.”

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