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Experts say airfreight rates will remain high and may rise

source:Schednet author:time:2007-08-23
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 Rising costs, salaries and fuel prices have put air cargo carriers in a position to introduce higher freight rates, after several years of flat growth, says a US industry association.

"This issue has always been a hot potato with forwarders," said Nolan Palud, spokesman for the San Francisco Air Cargo Association in a report in Logistics Management magazine.

"The airline pricing departments are responsible for formulating rates based on what it actually costs to provide lift," Mr. Palud said, also noting that rates had been low for 40 years. "Rates are further confused by tacking on surcharges rather than demanding across-the-board increases."

Said Giovanni Bisignani, CEO of the International Air Transport Association (IATA): "The pick-up in freight, led by Asia, could be the first sign of strengthening demand." According to IATA data, average air cargo load factors have so far remained strong at 73.7 per cent this year, an improvement of 0.1 per cent year to date."

But Mr. Bisignani added other factors at play: "We will be watching intensifying competition from other modes of transport and structural changes such as manufacturers producing lighter goods."

IATA predicts that 2007 will be the first profitable year for the industry since 2000, owing to high load factors and efficiency gains, the report added.




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