Lockdowns and Ukraine war keep air cargo rates high, Freightos data shows

Digital booking and payment platform Freightos saw air cargo rates remain elevated in 2022 as some marketplace rates nearly double compared with pre-pandemic levels amid the war in Ukraine and COVID-19-related lockdowns. Although rates on East Coast U.S.-Europe routes have decreased 28% year over year to $3.76/kg, they remain significantly higher than 2019, according to Freightos’ ocean and airfreight update webinar hosted today. [caption id="attachment_57131757" align="alignright" width="470"] Source: Freightos[/caption] “This was probably more pronounced in air than in ocean, that we saw decreasing rates,” Freightos Head of Research Lead Judah Levine said during the presentation. “We've seen that continued downward trend or some levelling off since [2021], but compared to pre-pandemic, rates still remain quite elevated.” Rates have also fallen nearly 50% since the past air peak season in November 2021, as passenger travel has restored belly capacity, Levine noted. Both trans-Atlantic traffic and passenger travel have rebounded during the summer months, pointing to strong demand. With the war in Ukraine and China lockdowns earlier in the year particularly affecting Asia-Europe operations , rates are beginning to fall as lockdown restrictions ease. In the last month, U.S. West Coast-China prices fell 15%, though they remain twice as high as 2019 levels, according to Freightos data. How high rates will increase by the peak season ? Freightos is unsure. “Because it's the typical low season, it's hard to say what changes in air cargo rates reflect about the overall demand situation, or more broadly about the economy,” Levine said. Freightos sees Q2 growth Thanks to carriers investing in digitalization , Freightos saw strong growth in the second quarter. The company reported $5.2 million in revenue in Q2, a 30% YoY increase, according to an Aug. 9 earnings report. Platform transactions, meanwhile, rose to 150,000, a 163% YoY increase driven primarily by major airline rollouts on the supply side, as well as an increase in bookings by existing carriers, Freightos CEO Zvi Schreiber said in the report. In 2018, Lufthansa became the first carrier to partner with Freightos for digital cargo booking . Since then, 20 more have signed on. Freightos saw the addition of several new carriers in 2022, including American Airlines Cargo , Air Canada Cargo, Caribbean Airlines Cargo and Teleport, with more on the way, the company said during the webinar. “The good news here is the industry is finally going digital, led by the carriers,” Levine said. “And then it's our job to take those digital tools and make them available to the forwarders.” In May, Freightos signed an agreement to merge with special purpose acquisition company (SPAC) Gesher I Acquisition Corp. to be publicly listed on the NASDAQ under the symbol FROS. The combined company will hold a pro forma enterprise value of roughly $435 million. The deal is projected to generate gross proceeds of at least $80 million and up to $166 million depending on redemptions. It is expected to close in the second half of 2022. Join Air Cargo World for our next webinar, “Forward Thinking: Best practices for freight forwarder success,” on Tuesday, Sept. 13, at 11 a.m. ET. Click here for more information and to register.

Lockdowns and Ukraine war keep air cargo rates high, Freightos data shows

Rates have fallen nearly 50% since past peak season, but remain elevated

Consultant Insight: SEKO Logistics’ Pixior acquisition to deliver faster cross-border e-commerce deliveries

Faroese salmon producer to launch 757F ops

Related Posts

Airbus, Air Canada to leverage Canada’s SAF potential in joint $10M project

Jet fuel prices rise 17.6% in 3rd consecutive week of increases

US’s 1st commercial-scale e-SAF plant opens as production costs stifle scale-up

Faroese salmon producer to launch 757F ops

Cargo Facts Free Newsletters

Cargo Facts Connect Podcast

Follow Us

Welcome Back!

Retrieve your password