Market Letters

International Airfreight Market Update – Week 48, 2020

There has been little movement in market rates or airport terminal queues since last week’s update. Activity in Europe (or the canceling of) may be a foreshadow of what’s to come. IATA releases vaccine transportation guidance.

Here is a short list of what we are seeing so far this week:

Rates Are Idle Prior to Thanksgiving:  After last week’s drop in airfreight rates, the transpacific market remains stable heading into the holiday. Rate fluctuations have been published at a +/- $0.10/kg difference week-to-week.

LAX Airport Congestion:  The Los Angeles/Long Beach seaports are not the only ones feeling the pain. Truckers are experiencing wait times of up to eight hours at airport terminals in the Southern California area. Local cartage companies that have the luxury of having an exclusive, dedicated freight dock for themselves are still sitting idle for three hours on average. These problems are nothing new, but they have only worsened since the pandemic, as prevention measures, short-staffs, and an influx of chartered aircrafts have all put a damper on operations. New appointment systems, rolled out at limited terminals, have shown promising results but widespread relief is still a long way off.

However, not all terminals are the same and some are better than others. When considering your next airfreight shipment, the destination terminal should be taken into account when reviewing rate quotes and service details, such as transit time. By doing so you can help to manage cost and delivery expectations more realistically.

Signals from Europe of an Airfreight Drop-Off: As lockdowns in Europe are becoming more widespread and stringent, airfreight bookings are being canceled in significant numbers. One forwarder in the UK reported the cancelation of hundreds of thousands of chargeable kgs, over many shipments, within just a three-day time period. They are far from the exception and the concern is that airfreight volumes for retailers, globally, will decline, mirroring the experiences from earlier this year when there was almost no activity.

Vaccine Guidance: In advance of the impending global challenges related to the distribution of Covid-19 vaccines, the International Air Transportation Association (IATA) has released a guide, found here, in effort to assist with overcoming a wide range of expected obstacles.

A short list of what to consider:

1) Available air capacity

2) Route connections

3) Temperature-controlled storage facilities

4) Customs clearance requirements

5) Security

6) The expected responsibilities of all parties involved.

Failure to have the proper procedures in place, with appropriate contingency plans, could lead to the waste, tampering or loss of vaccines, especially in high risk areas and countries with poor infrastructure.

For over 70 years, Laufer Group International Ltd. has been helping customers improve the way they handle their logistics. To see how we can help, or for any questions, contact Thomas Marano, National Director of Business Development, Ocean Import or contact your local sales representative.