Although capacity for air cargo is increasing, neutral consolidator CFR Freight says available space is limited and that rates are regularly upsold at the time of booking due to excessive demand.
According to the company’s airfreight director, Stephen Bishop, recent findings by industry researcher, Clive Data Services, underscore the company’s current market experiences in various regions around the globe and in their AirCargoGroup network.
More specifically, the Dutch aggregator said that although capacity was increasing, it might not stay ahead of the rising demand curve (*).
Bishop added: “The challenge is less so out of South Africa on exports but rather on confirming a connection at hub to final destination.
“Revenue management at most carriers is more involved than ever to ensure they are maximising on revenue within available capacity, particularly on constrained routes.”
On the imports side, he emphasised that CFR had noted that the Far East had become volatile again after a period of relative stability in their ‘slack season’.
“While volumes might not be at 2019 levels, given the limited capacity, we are feeling the effects of ‘peak season’ pricing - albeit with reduced volumes.
“Looking to the US, their whole supply chain is under pressure for air, ocean, road and warehousing. Ocean freight has its challenges, as the market has limited containers and available bookings, and on air they have also had challenges with new Transport Security Administration (TSA) regulations in place for the screening of cargo since April - which has created additional congestion for most.”
Elaborating on CFR’s response to requirements such as America’s TSA regs, Bishop said: “Our solutions to these challenges are to secure as many scheduled consolidations as possible on key carriers, preferably on blocked space agreements.
“This results in us having improved service through confirmed weekly bookings in markets such as the US, UK, Europe and China.
“With our ability to mix cargo on these consolidations, we can optimise the pricing. We expect to see many of these challenges carry over into the New Year but we are constantly looking to increase our allocations to counter the market challenges.”
(*) Read the relevant post here: https://tinyurl.com/ua79hx8u