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The skies are running hot

News   •   Oct 27, 2017 08:15 GMT

“When it’s on the shelf and it’s hot it has to go by air.” (Photo by Jason Chen)

With the air freight peak season picking up, the skies are getting busier by the hour. Already at the end of September, Panalpina’s global head of Air Freight, Lucas Kuehner, in an interview with Mike King, singled out HKG to LAX as one key lane where capacity would get even tighter. One month later, the scenario is a reality: “We are running at full capacity but will always find a solution for our customers. However, we are seeing first backlogs in the market and high ad-hoc buying rate increases”, says Kuehner.

In the interview with King, Kuehner also noted that new products such as the infamous fidget spinners had contributed to keeping air freight markets buoyant in 2017. “When it’s on the shelf and it’s hot it has to go by air. This is an example of what leads to sudden capacity crunches – two charters flown with this stuff eat into the market.”

Panalpina has warned customers to secure capacity early enough to avoid higher rates later in the year. The company had already contracted more than 100 ad hoc full charter aircraft outbound from Asia ahead of Q4 but is prepared to buy additional capacity on the open spot market.

Kuehner has observed that the air freight market is trying to establish new price points and therefore advises customers that they also need to shift their focus when it comes to procuring capacity: “The key is early engagement. They need to secure capacity first and foremost so they can get products on shelves on time.”

This is good advice not only for this year, but for the next one as well – because Bridget will fidget again. New products will launch and one of them will likely trigger the next hype. So it’s better to be prepared for the next capacity crunch up in the air.

Click on the above link to read Mike King’s full article for the Flying Typers.