DHL Says Ocean Freight Rates Have Reached Turning Point
Demand for ocean and air freight has been better than expected this year, with increasing volumes and rates finally improving after years in the doldrums, executives from freight forwarding company DHL, part of Deutsche Post DHL Group, said.
“We’re seeing relatively high demand for both ocean and air freight. We’re seeing rising volumes on several routes,” Tobias Meyer, chief operating officer and executive vice president for business support, DHL Global Forwarding, told Reuters.
“Given the debate around the new U.S. administration and Brexit, our customers had been expecting more of a negative impact on world trade,” he said in an interview.
The bankruptcy of South Korea’s Hanjin Shipping also helped to ease overcapacity on the container shipping market, he said.
On routes between Asia and Europe, customers are therefore having to wait up to four to five weeks, rather than one to two weeks, before their goods can be placed on ships and that is leading to an increase in freight rates.
“We’re seeing a turning point in rates. They’re no longer falling, as they had done over the last five to 10 years,” Meyer said.
The Harpex Shipping Index, which tracks weekly shipping container rates, has climbed 40 percent this year to 439 points, its highest level since October 2015.
Air freight, aside from Latin America, has also made a positive start to the year, Ingo-Alexander Rahn, global head of air freight at DHL Global Forwarding, said.
The International Air Transport Association on Wednesday said air freight demand climbed 8.4 percent in February, far better than the five-year average of 3 percent.
Due to the higher costs involved, normally time-sensitive or higher-value goods are transported by air.
But in light of the longer-than-usual waiting times, some ocean freight customers are switching to air to transport goods, Rahn said.
“That’s mainly the case when customers have to meet deadlines,” he said. (Reporting by Matthias Inverardi; Writing by Victoria Bryan; Editing by Dale Hudson)
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