Air and Sea Freight Rates Surge... Year-End Export Alert for Land, Sea, and Air Transport

Air Freight Rates Up 85% Compared to Last Year
Sea Freight Rates Set New Records Again

Incheon International Airport Korean Air Cargo Terminal. / Photo by Mun Ho-nam munonam@

A company exporting clothing to North America is recently exploring air cargo schedules to the United States. It is difficult to secure export vessels, and even if booked now, the shipment schedule is only available by mid-next month, making it hard to guarantee product arrival before the year-end peak season.

An official from the company said, "Clothing exported ahead of the season has traditionally used sea transport, but recently, using ships has made timely supply impossible. We reluctantly chose air freight as an alternative, but the freight charges are rising steeply, which is worrying. We are trying to meet delivery deadlines even at a loss, but we are concerned about how long we can sustain this."

Due to prolonged COVID-19-related logistics difficulties, air cargo freight rates have soared to record highs following maritime freight. With the global logistics crisis intensifying ahead of the year-end shopping peak season, the burden on domestic export companies is expected to increase further.

According to the aviation industry on the 13th, the TAC index for air cargo freight on the Hong Kong?North America route recorded $9.74 per kilogram last month. This broke the previous record high of $8.70 set in May four months ago. This is an 85.1% increase compared to the same month last year ($5.26).

Air cargo freight rates began to surge sharply in March last year as the COVID-19 pandemic intensified. While global cargo volumes increased due to strengthened non-face-to-face activities, the reduction in international flights led to a shortage of available transport capacity.

The Hong Kong?North America route freight rate, which was $3.19 per kilogram in February last year, soared to $7.73 in May of the same year, just three months later. Although rates temporarily dropped to $5.48 earlier this year due to a decrease in cargo volume, they are now approaching the $10 mark ahead of the year-end.

Maritime freight rates also recently resumed their upward trend after a brief adjustment last week, hitting record highs again within two weeks. The Shanghai Containerized Freight Index (SCFI), which indicates sea transport route freight levels, reached a record high of 4647.60 points as of last week. Freight rates on the North American West Coast route, a major route for domestic exporters, reached $6,371 per 1FEU (12-meter container), and European freight rates recorded $7,714 per 1TEU (6-meter container) during the same period, both setting new all-time highs.

Ryu Seong-won, head of the Industrial Strategy Team at the Federation of Korean Industries, said, "As maritime and air freight rates surge, it is necessary for the government to actively support the establishment of a joint logistics system, especially for small and medium export companies facing difficulties, so they can scale up."

This content was produced with the assistance of AI translation services.