THE beginning of May has seen a softening of the air freight market, with customers on long-term contracts paying more than the spot rate, reports London's Loadstar.

FOR the first time post-Covid crisis, the end of March capacity over the transatlantic is higher than pre-Covid crisis levels.

The extra capacity has led to low dynamic load factors, since the first half of January in western EU to North America.

It rose from 63 per cent to 67 per cent in the last week of April.

Other trade lanes have seen higher load factors, driven by constrained capacity rather than high demand.

"As of the end of April (week 17), shippers from Europe to the US are reporting an average short-term rate of US$4.10 per kg," said Xeneta.

"Long-term rates have not yet followed the same downward trend as the spot market and, on 30 April, the average rate for long-term contracts signed in the past three months was more than $1.70 per kg higher than the average short-term rate, at $5.90 per kg. Early indications show a softening in both rates in early May."

Meanwhile, overall rates have softened. "Indices look soft this week, but data points are sparser than normal, especially in Shanghai, where sources say carriers, after a dramatic pulldown of capacity recently, are slowly coming back to market after severe local lockdowns," said Xeneta.

Source Shipping Gazette