Rising Air Freight Challenges Indian Exporters Amidst Red Sea Crisis

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Air freight from India to key destinations such as the US, Canada, and Europe has more than doubled in the last three months due to disruptions in global shipping caused by the Red Sea crisis. This surge is significantly impacting sectors such as leather, textiles, pharmaceuticals, and food.

Israr Ahmed, Director at Farida Group, a prominent exporter of leather products from Chennai, highlighted the changes in air freight rates. Three months ago, air freight from Chennai to Munich stood at £296 per kg, but it has now risen to approximately £250. Similarly, air freight to the US and Canada has surged to £400 per kg, compared to £170 to £190 three months ago.

Ahmed noted that airlines are prioritizing destinations in the US, Canada, or Europe due to the high freight rates, resulting in less willingness to transship cargo to hubs like Hong Kong or Singapore, where rates are lower.

J Krishnan from S Natesa Iyer Logistics LLP, a leading freight forwarder, concurred with Ahmed, emphasizing the significant capacity crunch in airlines carrying cargo. Despite the operation of freighters by some airlines like Singapore Airlines, Cathay Pacific, Lufthansa, and Qatar Airways, demand is surpassing supply. Krishnan highlighted that while most orders are typically planned for sea shipment, disruptions are prompting a shift to air freight.

Additionally, large consignments of garments from Bangladesh are being diverted to Delhi for air evacuation due to capacity constraints in both sea and air modes out of Bangladesh.

The situation underscores the challenge faced by Indian trade due to insufficient national capacity, according to industry experts.

An airline official attributed the increase in air freight rates to demand and supply dynamics, stating that fares adjust accordingly.

source : The Hindu Business Line

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