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AI shippers still looking for capacity risk sharp airfreight peak squeeze

AI infrastructure shippers, still seeking peak-season capacity, could push air freight rates sharply higher, as demand for servers, chips, and data centre equipment adds pressure to an already firm market. According to TAC Index, sources have reported that ecommerce customers and other major shippers with product launches had secured peak-capacity, while some AI hyperscalers had yet to book their space. The warning comes despite a Golden Week dip in TAC's global Baltic Air Freight Index, which fell 2.1% in the seven days to 12 October, leaving it 24.3% above a year earlier. China's holiday ended on 7 October. While overall rates from China to Europe and the US softened over the week, nearly all TAC's spot rates out of Hong Kong, Shanghai, and Korea rose, with increases particularly evident in recent days. New analysis of US imports underlines the scale of technology-related demand. Supply chain professor Jason Miller's seasonal adjustment of Census Bureau trade data showed August air freight imports by weight reaching another record, up 20% year on year, and 42% above the 2023 average. Computer parts, including GPUs, contributed an additional 12,932 tonnes, compared with August last year, while prepared unrecorded media, including memory, added 11,111 tonnes. Electrical power equipment and insulated wire and cables were also among the leading contributors. Mr Miller said these categories pointed to the "disproportionate role" of investment in the physical infrastructure supporting AI computing in generating freight demand. His findings concern US air imports, but forwarder Forto also identified a broad shift towards technology in its third-quarter market analysis. Semiconductors, AI hardware, servers, and data centre infrastructure were the principal growth drivers, it said, while ecommerce had declined in relative importance. And the changing demand picture is also influencing how forwarders secure capacity. Speaking at an industry event in Liège last month, DSV's global head of airfreight, Stefan Krikken, said forwarders needed to balance firm capacity commitments with more flexible airline bookings and their own flying programmes, taking account of hyperscaler demand and constraints at cargo gateways. Hyperscaler demand was among the factors shaping those decisions, alongside the ability of gateways to accommodate the cargo. Morrison Express has also identified growing hyperscaler production in South-east Asia, and exceptionally high Taiwanese volumes as factors prompting a reassessment of its gateways. However, stronger demand and higher rates may offer carriers less financial relief than the headline figures suggest. TAC reported that jet fuel prices rose a further 3.1% in the week to 9 October, citing IATA's Jet Fuel Price Monitor, taking the year-on-year increase to 111.2%. And in his latest JTD Advisory briefing, founder David Kerr warned that fuel costs were rising faster than freight rates, putting pressure on operating margins. He expects fuel surcharge resets in the second half of October, and identified four-engine freighters as the aircraft most likely to face pressure to reprice, or be parked. Published surcharges already illustrate the pressure on shipping costs. Cathay Cargo's Hong Kong-origin long-haul fuel surcharge rose almost 26%, from HK$11.20 to HK$14.10 (US$1.42-$1.79) per kg, for the first half of October. DHL Air UK's equivalent charge increased 4.1% week on week, to HK$12.80 per kg for 12-18 October, although it remained below its late-September level. Japan Airlines will raise its fuel surcharge on domestic exports bound for the Americas and Europe from ¥185 ($1.16) to ¥192 per kg on 16 October, an increase of 3.8%. Its medium-haul and short-haul Asian surcharges will rise by around 4%. The impact on individual operators will depend on their fuel exposure and ability to recover costs, but the combination adds another pricing risk for shippers seeking remaining peak-season space. For those AI customers still to secure capacity, the question is how much room remains, and what it will cost.

Lufthansa Cargo joins Navi Mumbai as operators talk of airport challenges

Lufthansa Cargo has joined the growing number of airlines that have officially started operations at Navi Mumbai International Airport (NMIA), even as talk of operational challenges at the new hub have emerged. The cargo arm of Lufthansa said in a LinkedIn post on 14 October that it had moved its freighter operations to NMIA as Mumbai Chhatrapati Shivaji Maharaj International Airport (CSMIA) focuses on expansion work to increase capacity and efficiency. "Our first Boeing 777F freighter has successfully arrived at Navi Mumbai International Airport (NMI) on Monday, marking the start of our dedicated freighter operations at the region's newest airport," said Lufthansa Cargo. The business continues to handle belly capacity at CSMIA, as passenger flights are routed through the airport. "India is one of the strategically important growth markets for Lufthansa Cargo. By connecting Navi Mumbai, we are ensuring that our customers will continue to benefit from a high-performance infrastructure, reliable capacity, and seamless integration into our global network," commented Anand Kulkarni, head of global markets. CSMIA announced in January that it planned to suspend freighter operations for 10 months in order to carry out upgrades to cargo infrastructure. Freighter operators were asked to temporarily move their flights from CSMIA to NMIA while the work is carried out. This is expected to take 10 months and was due to start in August. NMIA opened its doors back in December, but freighter operations did not get underway until 1 August, when an IndiGo freighter took off from the airport. Silk Way West, Cathay Cargo, Hong Kong Air Cargo have all confirmed the shift of their freighter operations to the new airport. However, despite the growing number of freighter operations, some carriers have reported major challenges. Challenge Group recently suspended its freighter flights to NMIA. The carrier stated that the current operational setup "does not yet enable us to deliver our cargo services with the level of reliability and certainty we require". "While the circumstances leading to this situation are outside our control, the decision to suspend our service is a deliberate one," it added. Emirates has also reportedly expressed concerns. The Telegraph India reported that Emirates has said NMIA is "not ready" for international operations, including cargo warehousing operations, and it planned to retain operations at CSMIA.

NSR box shipping test 'a success', but S Korean carriers are sceptical

South Korea's President Lee Jae-myung says he remains committed to establishing container shipping services between Busan and Europe via the Northern Sea Route by 2030, despite lukewarm commercial interest. He said ferry operator Panstar Line's test voyage, with the 2,758 teu Panstar Acro, helped pave the way for the commercial viability of Arctic shipping. The ship had arrived back in Busan on Sunday, after the 40-day round-trip to Felixstowe and Rotterdam. Although cargo volumes were below target, just 837 teu loaded on Panstar Acro, Mr Lee hailed the voyage as a success. He wrote on X: "The ship completed the journey to Europe in a mere 20 days via the Arctic, whereas the Suez Canal route would have taken almost a month. We will continue to prepare for an Arctic shipping era, and this test trip would create new opportunities for businesses." Rising global temperatures have melted more Arctic ice, making the Northern Sea Route (NSR) seem a feasible substitute for the Suez Canal, particularly given the Red Sea crisis and US/Israel-Iran tensions. Promoting Arctic shipping also aligns with the government's plan to build an economic zone in the south, anchored by Busan, the nation's primary container port. The Ministry of Oceans and Fisheries plans to analyse details of the voyage to determine how Arctic shipping could become more commercially viable. Yet enthusiasm among South Korean shipowners remains muted. At an industry gathering, they noted that, once the Middle East crisis was resolved, the NSR could cease to be an appealing alternative to the Suez Canal route. Shipping executives pointed out that the NSR could only be navigated between August and November, when the Arctic ice thaws enough to allow passage. Draught limitations also make it impossible to operate large containerships on the route, unlike through the canal. Notably, Panstar was the sole bidder when the ministry sought operators for the test voyage in May - prohibitive costs, including insurance and modifications for polar navigation, deterred other companies. In August, the Korea Maritime Institute released a study showing the cost per teu of operating containerships through the Arctic from Busan to Rotterdam was around 55% greater than going via Suez, cancelling the advantage of the shorter sailing time. During the "welcome-back" ceremony for Panstar Acro yesterday, President Lee said he was aware of commercial scepticism towards the NSR. He added: "There are people concerned about the costs, but when we gain more experience and attract more cargo on Arctic routes, we can reduce costs and increase trust in the service."