Prime Freight’s summary of a December 2021 report by The Loadstar. Read the original for the full story.
In December 2021 analysts told The Loadstar that shippers should not expect air freight rates to fall much in early 2022.
An analyst at Stifel said the Omicron variant, its likely effect on passenger flights and bellyhold capacity, continued consumer spending on goods and labour shortages would keep prices high, so the usual first-quarter lull might bring less relief than hoped. Freight Investor Services agreed, noting that new travel restrictions were closing corridors. Demand showed some signs of softening, with Cyber Monday sales slightly below previous years, but capacity was tightening, with congestion on airport cargo ramps as well as at seaports, and bellyhold space might never fully recover if business travel stayed partly virtual.
The TAC Index showed November rates up 15% on October, with China and Hong Kong to North America at records above even the 2020 PPE surge. Some airlines were changing how they sold space, such as Southwest moving to guaranteed next-flight bookings and Cathay Pacific applying general rate increases to block-space agreements.
What it meant for shippers
Air cargo capacity depends heavily on passenger flights. When travel is disrupted, capacity shrinks and prices rise, so airfreight budgets at the time needed to assume high rates would persist.