Shipping costs have been going up across air and ocean, and there may be no end in sight. In this article, we will discuss the current landscape, and where things are going in terms of air freight shipping costs.
Air Freight Costs Then and Now
Before the pandemic air freight cost $2.5 per kilo.
During the pandemic, as a result of irregular PPE ordering, we saw rates at $7.5 per kilo. We thought that cost was substantial then, but it turns out those were the good days. Now, we’re seeing costs up to $15 per kilo.
Costs Will Continue to Climb for Air Freight
What do we see happening? Numbers will continue to climb.
Here’s why.
The Pudong International Airport is Closed
International flights to China are currently just 2% of what they were pre-pandemic. Pudong is one of the largest international airports in the world. Just this week, the Pudong International Airport has closed for six weeks. So we have to get creative with how we route international air freight through China.
With the massive reduction in international flights, that capacity has been taken offline. Even less space is now available on passenger jets, taking up air cargo capacity.
China Can No Longer Fly Over Russian Airspace
In addition to air freight costs going up and capacity restrictions, planes can no longer fly from China over Russian air space due to the sanctions.
Now, if you need your planes to get from Shanghai to Europe, you have to use a different route other than the Great Circle Route, which is critical for international air freight. With this route unavailable, air freight is now more time consuming and even more expensive due to longer routes, and necessary stops to fill for gas, which is also climbing in price.
This will cause even more shipping delays and associated costs.
What Can We Do?
We need to get creative with air freight in China.
Diversify, save, plan ahead, and get boots on the ground if you can.
Our experienced team will help you take on your toughest challenges in China and Southeast Asia overnight. The result is world-class, high-performing products on which your brand reputation and revenues depend.
Want to learn more about options you have on the table without flying? Let’s Talk.