2024 has been a very challenging year for global trade. We review how geopolitical issues have impacted the air freight industry, and what the outlook is for the remainder of the year.

PFE’s Air Freight department can help customers mitigate the current challenges affecting global logistics. We offer:

  • Worldwide coverage – China and Hong Kong, Indian Subcontinent, Americas
  • Daily flights and routings tailored to your requirements
  • Cross-border eCommerce solutions
  • In-house Customs Team
  • Seamless door-to-door services

Introduction

Importers have faced numerous challenges in 2024, notably the Red Sea Crisis, which has diverted most shipping traffic from the Suez Canal to the longer, more expensive route around the Cape of Good Hope. Additionally, recent political unrest has significantly disrupted supply chains in Bangladesh. Attacks on vessels in the Red Sea have further increased transit times for sea freight services. As a result, there has been a growing interest in alternative routes, including air freight, for transporting goods from China to Europe to mitigate disruptions.

Current Air Freight Market Situation

The current air freight market is experiencing a mix of easing and challenges across different regions. In China, the market is showing signs of relief as rates begin to fall and capacity improves, marking a positive shift from the tighter conditions seen earlier. However, the rates remain elevated compared to previous summers, largely due to the disruptions caused by the ongoing conflict in the Red Sea region, which continues to impact global logistics. Meanwhile, the air freight markets in India and Pakistan are relatively stable, with adequate capacity and steady rates, providing a reliable corridor for shipments. In contrast, Bangladesh is facing significant challenges due to ongoing civil unrest, which has led to delays of 6-7 days and has driven rates higher than usual.

Bangladesh Air Freight Options

For businesses needing to expedite cargo shipments from Bangladesh amid current challenges, air freight presents a valuable solution. The recent government-imposed curfews and internet blackouts, stemming from mass student protests, have severely disrupted transport services across the country. However, PFE can offer reliable alternatives to circumvent these disruptions. One of the most effective strategies we provide is rerouting cargo through Delhi instead of traditional hubs in the EU or the Middle East. This approach not only significantly improves transit times, ensuring faster delivery of goods for cargo leaving Bangladesh.

Avoiding Red Sea Delays

In response to the ongoing Red Sea crisis, there has been a significant shift in the logistics landscape, with shippers increasingly considering air freight as an alternative to traditional sea freight. The primary appeal of air freight lies in its ability to offer much faster transit times, a crucial advantage for businesses facing urgent shipping needs or trying to avoid delays caused by the conflict in the Red Sea region. This urgency has also spurred a growing interest in multimodal transportation solutions, particularly the combined use of sea and air freight. This strategy, known as sea-air freight, leverages the cost-efficiency of ocean transport for the initial leg of the journey, followed by the speed of air transport to complete the delivery. This hybrid approach not only circumvents the current detours around the Cape of Good Hope but also offers a more economical alternative to full air freight, typically reducing costs by around 50%.

How PFE Can Help

In the face of the current challenges affecting global logistics, PFE can assist customers in navigating these complexities using air freight services. Our hands-on, solution-based approach is designed to address the volatile situations worldwide, allowing us to rapidly deploy effective strategies. By leveraging our extensive network, we streamline the shipment process, ensuring a more efficient and reliable pathway for your goods. Our dedicated team continuously monitors the evolving landscape, enabling us to provide tailored solutions that meet urgent shipping needs and critical deadlines. We specialise in coordinating sophisticated logistics solutions, providing you with the support and alternatives necessary to maintain smooth operations and stay ahead in a challenging market environment.

Air Freight Market Outlook

For the latter half of 2024, the air freight market is expected to see growth alongside ongoing challenges. In China, both volume and rates are projected to rise after summer, driven by seasonal demand peaks such as Golden Week and the Christmas season. The Indian Subcontinent is also likely to experience slight increases in volume and rates, reflecting stable economic conditions. However, geopolitical events and regional disruptions, notably the ongoing Red Sea conflict, are creating a mixed outlook. These issues may lead to intermittent disruptions in capacity and pricing. Despite these challenges, strong demand for faster shipping alternatives will likely benefit the market.

Overall, while the market outlook for the remainder of 2024 is cautiously optimistic with expected growth in key regions, it remains tempered by the potential for unexpected disruptions and the complex global landscape.

If you think we can offer a solution to help, or you would like a quote, please contact our Air Freight department on 01753 278020.