Red Sea crisis sees businesses take to skies: Xeneta
Air cargo volumes from Vietnam to Europe – a major trade route for apparel – spiked 62% in the week ending January 14.
Retailers are turning to air freight to protect supply chains and keep their products on shelves amid the ongoing crisis in the Red Sea and Suez Canal, according to Oslo-based Xeneta.
The latest data released by Xeneta today, January 18, 2024, shows air cargo volumes from Vietnam to Europe – a major trade route for apparel – spiked 62 percent in the week ending January 14. "This is also six percent higher than 2023’s peak week in October, and a 16 percent increase on the volumes recorded in the same week 12 months ago."
Niall van de Wouw, Chief Airfreight Officer, Xeneta says: “This is the first signal in Xeneta data that the Red Sea crisis is impacting air freight. This is typically a quieter time of year for air freight. To see increases of this magnitude with higher volumes than at any point in 2023 is significant.
“Routes from Vietnam to Europe are used heavily for apparel, a sector we have been told is switching more goods from ocean to air due to the Red Sea crisis, so it is particularly noteworthy we are seeing volumes increase to such an extent on this trade.
“We should also recognise that the upcoming Lunar New Year may also be contributing to the increase in volumes.”
Air freight rates from Vietnam to Europe have increased by 10 percent compared to last week but with increasing volumes putting pressure on capacity and load factor, costs could be set to rise further, the update added.
“When the Red Sea crisis escalated in December, we stated that once the impact starts to be felt in air freight, things could happen very quickly," says Van de Wouw. “In the next two weeks, we should know for sure if this represents a genuine and significant shift from ocean to air freight due to the Red Sea crisis.”