In the aftermath, the Houthis continued to attack merchant ships passing through the Red Sea. Freight is increasingly relying on air despite high costs. After German automakers turned to more services to maintain production chains.
According to the weekly report of air transport specialist World ACD, in the first two weeks of January 2024, the volume of cargo transported by air between routes from Asia Pacific to Europe increased by 12% compared to the end of December 2023, reflecting changes in freight delivery patterns. Previously, sea freight was mainly used. Air freight is partly due to the Red Sea crisis, which means that transportation costs for companies will inevitably increase.
According to World ACD, during the second week of January 2024, customers had to pay US$2.34/1kg, which is less than what the airline charged in the first week of January 2024 at US$2.37. This is another major factor in why the crisis in the Red Sea has not yet caused air freight prices to rise. At this time, airlines around the world still have more than they need to transport.
Industry experts estimate that air cargo space is currently about 25% higher than the market demands, although the move to express air cargo services on some routes has had little impact on prices. Because there is enough space and there is fierce competition. However, the situation can change at any time. If the conflict in the Red Sea continues to drag on. Analysts at Bernstein Research expect freight to rise further in the coming weeks.