Air freight capacity has remained consistently tight following the Lunar New Year holidays in Asia. The China to Chicago lane is particularly congested. A long-term forecast indicates there will be high demand into the third quarter, however, with the return of more passenger flights, capacity should increase. As more people around the world get vaccinated, and passenger travel increases, the added volume of associated belly-space could lead to some easing of freight rates by year-end. In the short-term, we expect costs will jump for the next couple of weeks, as the airlines cater to a large release of cargo by Apple.
Rising fuel costs remain a significant concern and are worth watching.
Fuel Price Analysis
The jet fuel price ended last week up 0.9% at $72.9/bbl:
With month-over-month fuel costs up 10% and year-over-year up more than 70%, fuel costs may have a greater impact on overall cost this year.
If you have any questions, reach out to your Mohawk Global representative.