With seafreight rates on an upward trajectory - and equipment shortages, late vessels and still no guarantee of uplift affecting reliability - shippers in the UK are starting to switch to air and rather pay a premium for a predictable service.
That’s according to UK-based forwarder Metro Shipping.
“The current lack of container line consistency and reliability is unparalleled, with some lines seemingly moving to a transactional model, leaving analysts to point out the folly of a business model built on the backs of other market participants and ultimately the shipper,” according to a company spokesperson.
“Given the continuing unpredictability of the container shipping lines, it is increasingly difficult for many forwarders to provide adequate service levels to customers, as the carriers actively manage capacity and yields by exploiting the ad hoc market.”
Forwarders believe that carriers are providing a below-par service yet hiking freight rates, which is why shippers are prepared to pay a premium airfreight rate for the sake of reliability.
Metro points out that air capacity from Asia to Europe is still constrained, which means this increase in demand has already led some airlines to reject bookings or demand a higher rate to uplift cargo.
Scheduled freighter operators are full and many have a backlog of cargo while sea-air demand is also rising, but several airlines have “withdrawn their preferential rates without much advance notice, though expect this to be a temporary problem that will be resolved by the second half of December”.
And as rising rates attract more capacity to the markets, KLM, Qatar and Lufthansa are increasing the number and frequency of flights, although many are already booked, says Metro.
Heathrow and Benelux hubs remain congested and Shanghai has also faced some delays for large shipments.
“In the strangest of markets, it is no longer just about rates, it is about making sure customers get their goods and keep their supply chains running.
“On some routes, rates don’t even matter at the moment, the priority is to try and get the cargo on a ship, even if that means premiums, for the most critical consignments.”