Cargo backlog clears, but 'unfair' volcanic rates persist

BIG air cargo backlogs, caused by the spread of Icelandic volcanic ash, have mostly been cleared, but emergency rates persist here and there, reports London's International Freighting Weekly (IFW).

Sunny Ho, of the Hong Kong Shippers' Council, said he believed rates of up to US$13 per kilogramme were being demanded by some airlines last week.

Hong Kong's On-Time Express director Hardy Haenisch said: "Things are slowing down a little after the May Day holiday, but there is still quite a backlog. The situation is improving though, and my guess would be that by mid-May things may have normalised."

Mr Haenisch said that carriers were still taking advantage of the tight space situation by charging higher rates. "I believe the price range would now have come down to between $450,000 and $600,000."

One shipper told IFW: "The current spot rates from Shanghai vary from $4.40 per kilogramme to $10 per kilogramme for three- to four-day service to Europe. The best for us was a one-day transit at $6.10 per kilogramme on a direct flight. It seems to depend which airline the forwarder goes to."

Forwarders and airlines told IFW that ad hoc emergency rates are of up to 13 per kilogramme were no longer commonplace, but some airlines were offering highly inflated prices.

"For carriers such as Cathay Pacific, Lufthansa, Singapore Airlines, it is just two to three days at the warehouse," said a shipper of engineering products. Some said airlines have stated that emergency rules still applied and disregarded contract rates and continued to apply inflated rates.

A spokesman for Lufthansa Cargo said: "Because capacity was tight, many customers used our TD.flash [premium express] product to get priority access to capacity, but that was just in the first two weeks following the closures. Rates have gone up, but most of the effects of the backlog have gone. Accessing capacity should not be a problem any longer. There are still lanes where there is heavy demand, such as to South America, but things are mainly back to normal."

Shipper groups have protested inflated rates and blamed forwarders and carriers on Asia-Europe routes of taking unfair advantage.

European Shippers' Council chief Nicolette van der Jagt air freight was now going to the highest bidder, some airlines and forwarders refusing to recognise capacity allocation contracts.

Some air cargo rates were up $400 last week, as cargo backlogs in China and the Far East continued to mount. "Airlines and forwarders are saying that they are suffering from the closure of the airspace, but the real victims are likely to be the shippers," she said.

(Source: www.schednet.com)