Typhoon Chanthu poised to extend ex-Shanghai airfreight rates’ climb

Interruptions in airfreight from China caused by Typhoon Chanthu, alongside another record-setting month for container ships idled off the California coast, are likely to continue pushing airfreight rates ex-Asia higher after only a brief stabilization in pricing. [caption id="attachment_93615" align="alignright" width="450"] An Air China Cargo 777F. Photo/Air China[/caption] Airfreight rates ex-Shanghai Pudong (PVG) rose sharply from late August into early September after a COVID-19 outbreak among ground handlers at PVG led to the cancellation of a large share of cargo flights from the airport. According to rate information from TAC Index, airfreight rates from PVG to the U.S. increased by nearly $1/kg from Aug. 30 to Sept. 6, reaching $10.76/kg for the week of Sept. 6. — the highest rate for the index since the spike at the beginning of the pandemic in April and May 2020. Rates stabilized at that level through Sept. 13, but with Typhoon Chanthu forcing the cancellation of more flights , are likely to head higher again, according to market intelligence from Freightos. “Though air cargo rates out of China have stabilized as Pudong continued to recover from the recent COVID outbreak, the typhoon has closed airports around Shanghai, adding a new disruption to air cargo which could push prices up again soon,” said Judah Levine, head of research at Freightos, in a weekly market update. In a move that could be more supportive of ocean over airfreight, some major ocean carriers including CMA CGM and Hapag-Lloyd have capped spot rates through 2021, Freightos noted. However, Brian Bourke, chief growth officer with freight forwarder SEKO Logistics, noted that last week there were 55 container ships idled due to congestion at the Port of LA/Long Beach, setting a new record for ocean congestion off the U.S. West Coast. “We are truly entering a ‘super peak’ season, and shippers need to make bold decisions now whether it’s airfreight, air charters, fast boat services or taking advantage of ocean charter capacity in order to reduce the supply and demand shocks impacting so many right now,” Bourke said in a post on LinkedIn .

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