A SHARP rise in demand for air freight tracked by supply chain intel firm Xeneta demonstrates the rising anxiety among companies and shippers about the Red Sea crisis, reports CNBC News.
Air cargo volumes on the major apparel route from Vietnam to Europe has jumped 62 per cent in the week ending January 14.
The cost of air freight has not risen as sharply, but if Yemeni rocket attacks on vessels continue and cargo demand remains high, prices are likely to increase, said Xeneta.
"You'll have more and more companies getting nervous," said Niall van de Wouw, chief air freight officer for Xeneta.
The current spike in use of air freight is primarily in cargo volumes bound for Europe, as more companies avoid the longer Red Sea diversions around Africa's Cape of Good Hope, according to Xeneta.
Flights are already on average 93 per cent full from a cargo perspective, and it is likely air freight rates will increase much more than 10 per cent if the current increase in demand continues.
"If the Red Sea crisis continues, you'll have more and more companies getting nervous," Mr van de Wouw said.
Source: shippingazette