Alert: Trans-Pacific Eastbound Air Cargo Capacity

A recent spike in Asian exports is affecting air cargo capacity and pricing to the United States from Hong Kong and China, especially Shanghai (SHA and PVG).

Market Information – Less Capacity and High Seasonal Demand

Along with the recent launch of Microsoft’s Xbox, tech companies like Apple and Samsung are heightening demand on Trans-Pacific Eastbound flights as they rush to get their merchandise to retailers in anticipation of the holiday shopping season. Commercial air cargo carriers reduced their capacity in 2013 in response to soft demand overall, so even though a pre-holiday spike is not unusual, it is having a more pronounced effect this year.

Many of the large tech companies have resorted to chartering their own flights. In fact, more than 150 Boeing 747 all cargo freighters capable of hauling 98,000 kg per flight have been chartered so far. Nevertheless, this extra capacity has not been enough to meet the high demand created by these massive import product launches in addition to normal day-to-day general cargo moves.

This temporary capacity crunch is causing rates to spike on a daily basis. As such, some Peak Season Surcharges (PSS) have been implemented by various carriers and we expect others will follow suit. While we haven’t seen PSS in recent years, it is not an uncommon practice in the air cargo industry at this time of year. No one can say for sure how long the tightened capacity will last, but it is likely to continue through November and could possibly extend into early or mid-December.

What Our Customers Can Expect

Please be assured that AIT Worldwide Logistics is well positioned with our strategic air carriers to protect our cargo routings. We will do everything possible to ensure that our customers’ air cargo is uplifted in the most timely fashion. However, there may be some delays as a result of this surge.

AIT will continue providing relevant updates and timely solutions to fulfill your supply chain requirements. We thank you for your continued business with AIT, your global transportation management partner.

Questions?

Please contact your AIT account executive or AIT’s air operations experts for more information.

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