Europe's freight sector recovery is running out of steam

ASIA-EUROPE air freight rates are sliding amid a weakening euro, concerns over economic growth and uncertainty among retailers, say forwarders in Asia.

One air cargo agent in Hong Kong said air freight rates had decreased by such an extent in July that they were now barely "nominal," reports London's International Freighting Weekly.

It said all-in ad hoc freight rates into Europe from North Asia had declined to US$3 per kilogramme, citing comments from another unidentified air freight agent.

According to a forwarding source on the mainland, freight rates from Shanghai had dropped to around US$2.80/kg.

The report said rates on services into Europe had declined throughout the continent over July, citing "another major air freight agent based in South-East Asia, who also asked not to be named."

The unnamed source said freight rates were at levels half those seen in late May and less than one-third of prices quoted in April, as backlogs created by the volcanic ash cloud in Europe were being removed.

"When North Asia sneezes, South Asia catches a cold," he said. "We are not expecting a peak period this year.

"Demand has subsided, and the momentum of the first half of the year has dissipated.

"We usually see a surge at the end of June as companies prepare for the quarter-end, but it didn't happen this year. We'll have to see about September," the source was quoted as saying.

According to the report, the unnamed source said speculation of "slowdown on key lanes could be related to the European summer holidays, the decline of the euro in recent months, and/or more cautious buying strategies," it said. "Some manufacturers have cancelled orders, others have moved back to using sea, now they have adapted inventories to slow-steaming.

"It might improve in September, but it's hard to tell."
(Source:www.schednet.com)