Red Sea Conflict Boosts Air Freight Bookings

After two challenging years air freight has been showing signs of strength. According to the IATA, the mode saw its strongest year-over-year growth in November 2023, rising 8.3% to 22.4 billion cargo to-kilometres (CTK) over 2022.

It was the biggest month of rising air cargo demand since an 8.4% increase in December 2021. And a large contributing factor to this was Ecommerce demand ex China which saw larger than expected traction in month 10 and 11 last year.

But as 2023 drew to a close, a new challenge was dropped on the toes of logistics professionals just before the festive break in the form of the Red Sea conflict. Already, we’ve seen this dispute escalate with both the USA and Britain now taking military action.

With the Suez Canal still at the centre of this action, it seems shippers are looking for solutions elsewhere.

Air freight as a possible alternative

As we saw during the pandemic, when rates go up, the difference in cost between ocean and air shrinks – although still firmly in favour of sea freight and other slower transit modes. Consequently, for shippers using Asia-to-Europe and Asia-to-US routes, air becomes a viable option when ocean availability contracts.

It’s perhaps for this reason that, according to the IATA, flights out of Asia Pacific and the Middle East saw the biggest jumps in demand in recent weeks, at 13.8 percent and 13.5 percent increases in CTK.

These figures still don’t match the heights of pre-covid levels, but that may change as ocean spot rates continue to skyrocket and importers load up on inventory ahead of February’s Lunar New Year, when Chinese factories close for two weeks.

There’s also the argument that many shippers don’t yet appreciate the ramifications of the extra transit times caused by the ships that are being rerouted around the Cape of Good Hope. And that when they do, they’ll reconsider paying premium for a delayed ocean service.

Plus, even if they weren’t deterred by delays, there’s still the issue of capacity. Ultimately, the issue of vessel availability due to the diversions in place will likely become the overriding factor in the decision on how to proceed with an individual freight movement solution.

De-risking supply chains

Another motivation shippers will have for reconsidering air in 2024 is the push across the industry to de-risk their supply chain.

The pandemic saw a lot of businesses recognising the vulnerabilities involved in relying on Chinese manufacturing for an entire product range. Covid outbreaks and subsequent lockdowns meant that even after the peak of the pandemic, there were still regular disruptions to deliveries and shipments.

Since, huge organisations such as Apple and Microsoft have looked to diversify their supply chain so that not all their products are produced in the same place. The idea being that should the main trade lanes be disrupted again the impact isn’t as devastating.

As a result, India has increased its production of electronics and diversified its manufacturing with the support of large Blue-Chip companies who are looking to spread their production output into other areas rather than just China.

But there are other ways to diversify your supply chain without moving manufacturers. Changing modes for certain goods allows businesses to ensure their need-to-have products are always in stock.

Within air freight there are many different solutions that can be selected which are niche to certain individual movements, and in our experience both Imports and Exports are often surprised at the availability of services that can be presented for their freight.

See how we could help you

With us only being a couple of weeks into the new year it’s no surprise that rates haven’t already shot up, but it is on the horizon… Who knows where things will be in a months’ time after CNY, with the crisis in the Red Sea seeing no quick resolution, airfreight could be the ideal interim solution for your operation.

By reviewing your supply chain now, you could ensure your essential goods don’t miss their delivery deadlines. Find out how by emailing our air freight team at