Yemen takes control over Red Sea, causes problems in global air freight rates
Date
1/31/2024 7:11:47 AM
(MENAFN) Global air freight charges have experienced an upsurge for the first time since December 11, as incidents targeting commercial vessels in the Red Sea prompt companies to opt for air transportation to mitigate security risks.
The Baltic Exchange Air Freight Index, reflecting weekly transactional rates for general cargo provided by freight forwarders, surged by 6.4 percent in the week ending January 29 to USD1,972, according to data from the price calculating agency TAC Index. This increase follows a series of consecutive declines since a peak observed in the middle of the previous month.
During the specified period, air cargo rates originating from Shanghai witnessed an 8.8 percent week-on-week rise, while rates from Hong Kong climbed by 5.9 percent, and Singapore saw a 4.1 percent increase, as indicated by the data.
In response to the evolving situation, German logistics behemoth DHL is recommending its clients to reassess their inventory management strategies and make necessary adjustments, considering the diversion of shipments away from the Red Sea. DHL also highlights its ability to provide customers with various transport alternatives, including air freight or rail, to address their evolving logistical needs.
"Some companies are already shifting to other modes of transportation, with air freight being the first choice. If the situation in the Red Sea continues to escalate, more companies may choose to go via air," a firm spokesperson told a UAE-based news agency.
"Depending on the specific trade lanes, we are observing an increase in air freight rates due to the situation in the Red Sea and in anticipation of the Chinese New Year."
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