Red Sea assaults by the Houthi have not only escalated sea freight rates but are also set to cause a surge in air freight costs due to global trade disruptions. Over the past weeks, ocean freight rates have soared by up to $10,000 per 40-foot container. This increase is due to the diversion of more than $200 billion worth of cargo as container ships circumnavigate the Cape of Good Hope in South Africa to avoid the attacks.
Analysts believe that the maritime trade delays may cause retailers to switch to air freight to ensure quicker delivery. As such, air cargo is poised to play a more significant role in the supply chain ecosystem, given its ability to reduce delivery times to a few days compared to weeks taken by ocean carriers.
Matthew Burgess, the vice president of global ocean services at C.H. Robinson, noted that some shippers are prioritising freight movement by any means necessary. In anticipation of a surge in ocean-to-air conversions, the transportation logistics firm is already reserving additional air capacity on key trade lanes.