Dimerco Express Group is partnering with Cathay Pacific to run an air cargo charter service from Shanghai (PVG) to Chicago (ORD) during the fourth quarter peak season in a bid to capture air cargo demand.
The once a week service will run from September 12 to December 5 using a Boeing 747-800 freighter operated by Cathay Pacific, said global shipping and logistics company Dimerco in a post on its website.
The B747-800F will depart from PVG on a Thursday morning local time, stops in Hong Kong and then arrive in ORD at 1.40pm on a Friday local time.
Dimerco's PVG to ORD charter service will be offered as either airport to airport or door to door. Dimerco will work with its truck carrier network for final-mile delivery from Chicago.
“Traditional airfreight shippers will be searching for added capacity,” said global sales & marketing director Kathy Liu. She added that this is particularly applicable for "brands launching new products for the holiday season, since they can’t afford inventory delays that would jeopardise a major selling day, like Black Friday".
But she also believes there will be interest from ocean shippers who see the China to US air cargo charter service as an alternative to oceanfreight services that could become unreliable and costly as peak season approaches, as seen in 2021.
“Airfreight is typically 12–16X more expensive per kilo than container shipping. But right now that gap is just 6–8X and shrinking. Couple that with a China-to-US, door-to-door transit time for container freight of up to 40 days and brands will be open to alternative modes," reflected Liu.
As well as increasing transpacific oceanfreight rates pushing up airfreight demand, e-commerce companies are amongst the shippers putting pressure on fourth quarter air cargo capacity.
"Typically, about 30%–40% of carrier space is pre-allocated under contracts with forwarders, with the balance available to the rest of the market. But this year that pre-allocated percentage is much higher, limiting sellable space," said Dimerco.
"One reason for this is that Temu, Shein and other e-commerce companies in China are demanding freight forwarding partners have at least one Block Service Agreement, or BSA (space under contract) in place with a carrier. As a result, many small and medium-sized forwarders have signed minimum volume agreements with carriers (e.g., 25–50 tons per month). So, you have more pre-committed space and limited extra space to sell ad hoc in the open market."
Shipper and forwarders have been looking for longer term capacity contracts ahead of the peak season, with peak season surcharges and major increases in spot rates expected, said Xeneta earlier this month.
