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Air cargo volumes from Dubai to Europe were up more than 200 % in mid-March . M101Studio / Shutterstock . com

Demand soars for Asia – Europe sea-air option to avoid longer Africa transit

By Greg Knowler

Asia – Europe sea-air hubs are booming as shippers with urgent cargo take the multimodal approach to avoid the extended transit times from vessels sailing around southern Africa . Air cargo volumes from Dubai to Europe in mid-March

were up 7 % from the previous week and more than 200 % higher than at the same time last year , according to data from air freight analyst WorldACD .

“ Certain key Asia – Europe sea-air hubs such as Dubai , Colombo and Bangkok have experienced exceptionally high air cargo demand to Europe since the start of this year , in large part linked to the disruptions to Asia – Europe container shipping caused by the attacks on vessels in the Red Sea ,” the Netherlands-based analyst said March 15 .

Dubai continues to be one of the more popular destinations for European importers of time-sensitive cargo , with

Ex-China air freight rates rising after Lunar New Year lull

Outbound Shanghai air cargo spot rate index , with year-over-year change

Level of Index

8,000

7,000

10,000 6,000

5,000

4,000

3,000 Apr L Jul Oct Jan 2023 Apr Jul Oct Jan 2024

Shanghai Year-over-year % change

60 % 40 % 20 % -100 0 % % -20 % -40 % -60 % -80 %

Year-over-year % change the airport able to convert ocean freight transferred from Jebel Ali seaport to air cargo in 24 hours .

“ Dubai – Europe tonnages have been particularly strong , at more than double their level in recent weeks compared with this time last year , and the continuing surge in week 10 indicates this trend is showing no signs of weakening four weeks on from the Lunar New Year ,” WorldACD noted .

The sea-air option through Dubai is up to 40 % cheaper than direct air freight transport from Asia and is faster than pure ocean service .

Other sea-air trade lanes are also reporting a strong rise in volume . Bangkok – Europe demand was up by more than 30 % year over year mid-March , boosted by road-air volume trucked down from Vietnam and other origins in the region .

WorldACD noted that the surge in Colombo – Europe demand appears to be softening but remains up 20 % year over year and has risen 80 % since mid-February .

Air freight charter operators are also reporting a surge in business since ocean carriers diverted around the Cape of Good Hope .

“ The Red Sea attacks are causing a lot of time-sensitive traffic to switch to air freight ,” Brian Davis , general manager at Neo Air Charter , said in a statement March 15 . “ We haven ’ t seen demand like this since the early days of COVID .”

A ‘ surprising start ’

From a global perspective , air freight volume increased 11 % year over year in both January and February with rates continuing to trend upward even through the traditional post-Lunar New Year market slowdown , according to Niall van de Wouw , chief air freight analyst for Xeneta .

“ It ’ s a surprising start to the year from a volume perspective , and not something people would have expected , ourselves included , with demand much higher than it was a year ago ,” van de Wouw said in a statement , adding that it is unusual to see rates increasing at this time of year .

“ This is likely related to the Red Sea disruption , but this is not the only factor ,” he said . “ Trends indicate more consumers are buying on e-commerce platforms and the intercontinental nature of these businesses , as well as the speed with which they are expected to deliver , is benefiting air cargo .”

Van de Wouw said e-commerce now makes up over 50 % of the revenue from East Asia for some air cargo carriers .

Forwarders in China report large e-commerce platforms or marketplaces such as JD . com , Alibaba , Shein or Temu buying up huge amounts of air freight space out of China to North America , which has kept rates elevated .

“ The booming e-commerce sector is continuing to help air cargo demand to trend above growth in both trade and production since the last quarter of 2023 ,” Willie Walsh , secretary-general of the International Air Transport Association , said in a statement .

Average air cargo spot rates from Shanghai to North America reached $ 4.55 per kilogram in mid-March , up 7 % from the previous week , according to the Baltic Air Index , despite air freight capacity rising steadily as increasing longhaul passenger travel adds below-deck cargo space .

Source : Baltic Air Freight Indices powered by TAC © 2024 S & P Global email : greg . knowler @ spglobal . com

30 Journal of Commerce | April 8 , 2024 www . joc . com