Shippers Seek Long-Term, Low-Rate Air Freight Contracts as Capacity Grows

Trade & Border IssuesHot Spots
Written By Jennifer Joslyn

As air cargo demand stabilizes and capacity increases, shippers are now in a better position to negotiate air freight rates, with a focus on securing low-rate levels for longer periods. This shift follows the capacity-constrained market during the pandemic, which favored air carriers. Shippers, especially in industries like automotive and pharmaceuticals, are expected to issue more RFQs (Request for Quotes) for longer-term agreements, ranging from six to 12 months, as previous contract agreements based on higher rate levels expire.

Read more from Supply Chain Dive ▶

Featured
Peter Penseel Departs CMA CGM Air Cargo
Peter Penseel Departs CMA CGM Air Cargo

Peter Penseel, a veteran in air logistics, has stepped down as deputy CEO of CMA CGM Air Cargo, leaving the airline without an experienced air freight specialist.

The Aviation Supply Chain is Facing New Challenges and Strategies
The Aviation Supply Chain is Facing New Challenges and Strategies

Supply chain issues in the global aviation sector are starting to improve, but it may still take a couple of years to fully resolve them, according to industry experts at the Singapore Airshow.

Fast-Fashion Giants Shein and Temu Disrupt Global Air Cargo Industry
Fast-Fashion Giants Shein and Temu Disrupt Global Air Cargo Industry

The rise of fast-fashion e-commerce giants like Shein and Temu is shaking up the global air cargo sector, according to industry insiders.

DeliverDirect is Revolutionizing E-Commerce Shipping with Delta Cargo and SmartKargo Partnership
DeliverDirect is Revolutionizing E-Commerce Shipping with Delta Cargo and SmartKargo Partnership

Efficiency in e-commerce shipping is crucial, and Delta Cargo and SmartKargo have joined forces to tackle common pain points for small parcel shippers.

Maersk Expands End-to-End Supply Chain Services
Maersk Expands End-to-End Supply Chain Services

Maersk is expanding its services to cover the entire supply chain, including air cargo operations.

FedEx Expects Significant Business Loss with USPS
FedEx Expects Significant Business Loss with USPS

FedEx is anticipating a significant loss of business with the U.S. Postal Service when its current contract expires.

Shippers Seek Long-Term, Low-Rate Air Freight Contracts as Capacity Grows
Shippers Seek Long-Term, Low-Rate Air Freight Contracts as Capacity Grows

As air cargo demand stabilizes and capacity increases, shippers are now in a better position to negotiate air freight rates, with a focus on securing low-rate levels for longer periods.

Postal Service Slashes Air Cargo by 90% in 2-Year Cost-Cutting Drive
Postal Service Slashes Air Cargo by 90% in 2-Year Cost-Cutting Drive

The U.S. Postal Service has drastically decreased its air cargo shipments by 90% over a two-year period, leading to an estimated $1 billion in annual transportation cost savings, according to U.S. Postmaster General Louis DeJoy.

Shippers Expected to Gain Advantage in Winter Air Cargo Contract Negotiations
Shippers Expected to Gain Advantage in Winter Air Cargo Contract Negotiations

As winter approaches, shippers are expected to have the advantage in air freight rate negotiations due to declining demand and spot rates in the air cargo industry.

LAX Airport Selects Developer for Groundbreaking Cargo Transformation Project
LAX Airport Selects Developer for Groundbreaking Cargo Transformation Project

Los Angeles International Airport (LAX) has chosen a consortium led by Realterm, the largest manager of on-airport air cargo real estate in North America, to undertake a revolutionary cargo improvement project.

Declining Cargo Revenue Signals Optimistic Travel Industry Recovery for Airlines as Travel Demand Rebounds
Declining Cargo Revenue Signals Optimistic Travel Industry Recovery for Airlines as Travel Demand Rebounds

Airlines' cargo revenue is experiencing a significant slump, with Delta, United, and American reporting year-over-year declines of about 40% in their second-quarter cargo revenue.

Cargo Aircraft Missing from Paris Air Show Dealmaking
Cargo Aircraft Missing from Paris Air Show Dealmaking

During the Paris Air Show, Boeing and Airbus have been focusing on customer orders for new passenger aircraft, with limited activity in the freighter sector.

Cargo iQ, FIATA, and ASA Collaborate for Air Cargo Standardization
Cargo iQ, FIATA, and ASA Collaborate for Air Cargo Standardization

Quality standards organization Cargo iQ has partnered with the International Federation of Freight Forwarders Associations (FIATA) and the Airport Services Association (ASA) to collaborate on enhancing standard practices in the air cargo supply chain.

Air Cargo Space Becomes Attractive for Large Shipping Companies
Air Cargo Space Becomes Attractive for Large Shipping Companies

Steamship lines are diversifying their services and seeking a larger share of the global logistics market by entering the rapidly growing air cargo market, according to the International Air Transport Association.

Revamping Air Cargo for Modern Times
Revamping Air Cargo for Modern Times

Carriers have announced plans to modernize their operations by eliminating paper trails.

The global air freight market may be signaling the end of globalization
The global air freight market may be signaling the end of globalization

Globalization is a complex and multifaceted process that involves the integration of economies, cultures, and societies across national boundaries.

GAP celebrates lower air freight rates, improving operating margins
GAP celebrates lower air freight rates, improving operating margins

In a November 17th earnings call, Gap CFO Katrina O’Connell credited lower air freight rates to the company’s improved operating margins during Q3.

The U.S. & Korea have gained a Maersk air cargo route
The U.S. & Korea have gained a Maersk air cargo route

Two new weekly flights have been scheduled between Greenville-Spartanburg Airport (GSP) in South Carolina and Incheon Airport (ICN), increasing the air market accessibility between Asia and the Southeast region of the United States.

After years of Covid flight restraints lifted, air freight spot rates are on the decline
After years of Covid flight restraints lifted, air freight spot rates are on the decline

Globally, flights were grounded for years due to Covid-19 restraints. Now that the flight paths have opened up wide, flight capacity is growing and air cargo spot rates are shrinking…

FAA invests $31 million in air cargo infrastructure projects
FAA invests $31 million in air cargo infrastructure projects

The Federal Aviation Administration is opening its wallet and sending out $31 million in federal grants for nine different air cargo infrastructure projects at airports across the United States.

Growing dispute issues with pilots union force FedEx Express to hire mediator
Growing dispute issues with pilots union force FedEx Express to hire mediator

The federal government is stepping in to help mediate labor talks between FedEx Express and Air Line Pilots Association, International (ALPA).

Air freight rates beginning to drop from staggering highs
Air freight rates beginning to drop from staggering highs

According to data from Clive Data Services, constant issues plaguing world trade have caused air freight rates to droop from their recent historic highs.

Air cargo rates and volume drop
Air cargo rates and volume drop

Labor shortages have concerned the air freighters as they struggle to manage the workload, even as capacity has dropped.

Jennifer Joslyn
Previous

Freight Brokers Optimistic About Future Growth Despite Current Weakness
Next

Revisiting Amazon's Anticipatory Shipping Patent: The Evolution and Potential Future Applications