Fare problems for airlines remain amid allegations of transatlantic fare dumping Ship’s crew

By Mike Wackett (The Loadstar) –

Airlines from Asia and Northern Europe are required to discount fares at that time of year – before the peak season – when they would normally expect fare increases.

According to the carriers The Loadstar I spoke to him at the UK Multimodal Show this week that while there are new orders in the pipeline, these won’t be converted into bookings until late July/early August.

This improved visibility is welcome news for airlines, even if they have to hide more departures in the meantime or risk a race to the bottom in a price bloodbath.

Indeed, Drewry’s Asia-Northern Europe component is down 7% this week at $1,349 per 40 feet, with the average spot rate now 86% lower than a year ago.

However, there is better news for Asia-Mediterranean airlines as strong demand on the trade supports a stable fare environment. For example, the Freightos Baltic Index (FBX) was flat again this week, reading at a relatively healthy $2,366 per 40 feet.

In the transpacific, the effects on cargo routes of the “interim” new US West Coast contract agreed this week between employers at the Pacific Maritime Association and the ILWU are still being seen. West Coast ports are hoping this will slow the shift in coasts of imports from Pacific hubs to US East and Gulf Coast ports.

After a brief spike in spot tariffs last week due to the increasing threat of labor disputes in West Coast ports and draft restrictions on Asia-USEC vessels transiting the Panama Canal, tariffs have started falling again.

Xeneta’s average XSI spot rate from Asia to the USWC fell 6% this week to $1,414 per 40 feet, while Drewry’s USEC tumbled 8% to $2,783 per 40 feet.

Elsewhere, in the transatlantic market, spot indices are suggesting that the erosion of freight rates may be coming to an end – for example, the FBX Northern Europe average price to USEC remained unchanged this week at $2,082 per 40 feet, while the XSI value was only decreased by 1%. to $2,057.

However, there are fares advertised by transatlantic carriers in the market at much lower prices – in some cases as little as US$1,200 per 40 feet. In comparison, spot prices in March were $4,000 per 40 feet and up to $8,000 a year ago.

However, as freight rates on other trades have fallen sharply, airlines have added more capacity to the transatlantic route, putting pressure on freight rates. A senior airline representative at Multimodal claimed that some of its competitors on the route had operated “dumping” rates.

“I don’t think they know what they’re doing; “It’s just the people at the fare desk who have been given the green light to undercut a competitor — and that’s often a big part,” he said.

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