Air freight will remain high at the end of the year
The main reasons for maintaining high air freight rates at the end of the year are as follows:
Strong market demand
Year end shopping season: The end of each year is the global shopping peak season, including holidays such as Christmas and New Year, where consumer demand for various products increases significantly. Retailers will increase their procurement and transportation of goods in order to replenish inventory in a timely manner and meet consumers' shopping needs. A large amount of goods need to be quickly transported to the sales location, leading to a significant increase in demand in the air freight market.
E-commerce business growth: In recent years, the booming development of e-commerce has increasingly relied on air cargo transportation. Consumers often expect to receive their goods as soon as possible after shopping online, and air freight has become the preferred transportation method for e-commerce companies due to its fast and efficient characteristics. Frequent e-commerce promotion activities at the end of the year, such as the follow-up shipments of shopping festivals like "Double 11" and "Black Friday", have further driven the growth of air freight demand.
Tight supply of transportation capacity
The limited number of cargo planes: Air cargo capacity mainly relies on full cargo planes and passenger plane belly cargo. The number of all cargo planes is relatively stable and difficult to significantly increase in the short term; However, the cargo capacity in the belly compartment of an aircraft is limited by factors such as the aircraft's route arrangement and passenger load factor. During the peak period of passenger traffic at the end of the year, the belly compartment space of the aircraft will also be correspondingly reduced, leading to further tension in the available cargo capacity.
The influence of weather factors: Severe winter weather conditions, such as blizzards, heavy fog, and other weather phenomena, may lead to flight delays or cancellations, reducing the actual capacity of air transportation. Meanwhile, adverse weather conditions can also affect the efficiency of cargo loading, unloading, and transportation, further exacerbating the situation of tight transportation capacity.
Rising operating costs
Fuel price fluctuations: Fuel costs are an important component of airline operating costs. Although fuel prices have remained relatively stable in recent years, there is still a certain degree of volatility risk. At the end of the year, if fuel prices rise, airlines often pass on the increased costs to freight prices in order to maintain operating profits, leading to an increase in air freight costs.
Increased labor costs: The salary levels of aviation professionals such as pilots, flight attendants, and ground crew continue to rise with economic development and inflation. At the end of the year, it is usually a period of increased employee bonuses, benefits, and other expenses, which increases the pressure on labor costs for airlines and to some extent helps to maintain high air freight prices.