Airfreight pricing itself out of the market

THERE IS an on-going international swing to seafreight from airfreight, with comparative rates distinctly favouring the maritime mode. This is shown in the latest figures from the International Air Transport Association (Iata) – which represents some 240 airlines, comprising 94% of scheduled international air traffic. International airfreight traffic grew by 4.3% in 2007, down slightly from growth of 4.6% seen in 2006 and much lower than the 7-8% growth trend of recent years. And, although air freight demand grew 4.7% in December, up from 3.5% in November, it was largely due to temporary year-end factors, according to the association. The airfreight demand environment will remain challenging, said Giovanni Bisignani, Iata directorgeneral and CEO. He expected growth to slow in the first half of the year, before picking up to an overall growth of 4%-4.5% for 2008. "Growth was also below the 7.5% at which global trade expanded, highlighting a competitiveness issue with shipping," he added. There is a similar trend in SA, according to Sarel Pretorius, MD of Röhlig Grindrod, who noted from his customer base that there was a noticeable preference for the lower costs of seafreight. "Everybody would love to go seafreight," he told FTW, but noted that high-value, time-sensitive imports still tended to go by air. "If you ask me at this stage why incoming flights are all almost packed to capacity with import airfreight, I can't say. But the volumes are still there." That's a bit of a contrary factor to the general state of airfreight internationally, Pretorius added, with the air cargo industry rapidly pricing itself further out of the market. “The fuel and security surcharges are now roughly equal to the airfreight rate,” he said, “and that’s making air cargo transport pretty expensive.”