


By Kelly Stroh of Supply Chain Drive
June showcases the “jumpiness in the market,” according to van de Wouw. As the decline in available capacity eased in June, up 8% YoY, and freighter demand continues to normalize due to recovering summer capacity, many carriers are reviewing routes and capacity strategies.
“The surprise in June is the difference between the sentiment in the market and what the actual data is showing us,” van de Wouw said. “It is getting pretty nasty out there and stress levels among airlines and forwarders are clearly rising, but we see a clear distinction between market sentiment and market fundamentals and sentiment is more negative right now.”
Currently, air cargo rates from China to North America are at $3.94 per kilogram, up slightly week over week, according to a July 11 emailed update from Freightos. Meanwhile, transAtlantic prices were reported at $1.81 per kilogram, down 5% WoW.
After years of elevated, pandemic-driven demand, the air cargo market has slowed, leading stakeholders to readjust their growth strategies. In Q1, the market was showing signs of stabalizing as shippers opted for longer-term contracts, but now freight forwarders remain locked into block space agreements and are feeling pressure from shippers to renegotiate prices to reflect current market value, according to Clive.
“The big question now for carriers is do they go for margin or volume? No one wants to be flying empty, and even the most respected airlines seem to be recognizing they have to join the game because if they keep their rates at a high level, they just won’t get the volume,” van de Wouw shared. “Two years ago, airlines were asking ‘what am I going to do with my belly aircraft’ and now it’s a case of ‘what am I going to do with my freighters?’”
“It’s going to be a long summer for airline cargo departments, and it looks as though it will take a few quarters for the market to move away from the current irrational pricing environment,” he added.