Air cargo forwarders are sticking to using spot market rates, because “anything can come out of the White House right now”.
Brandon Fried, executive director of the Air Forwarders’ Association, said on the sidelines of IATA’s CNS conference in Miami last week that the 90-day ‘reciprocal tariff’ pause had made long-term airfreight contracts much less desirable.
“I spoke to a couple of airlines and they said people were willing to sign for 30 days, but not willing to make longer commitments. Because you don’t know what’s going to happen in 90 days – anything can come out of the White House right now.”
Mr Fried added that with this heightened uncertainty, making substantial investments would be “foolish”.
“If you’re as confident about the business environment as you were during the last administration, you could say, ‘okay, we’re going to block-space for the next year’, but I think that’s currently foolhardy,” he said.
As for those that have already invested in long-term block-space agreements, Mr Fried assured that, in many cases, “airlines are being flexible, and they understand”.
He added: “Much the same as those agreements can be long-term, these relationships between forwarders and airlines are long-term. They’ve been sustainable for many years. So, these airlines want to do business with us, and they want us around for the foreseeable future as viable customers.”
Stephanie Abeler, VP Americas at Lufthansa Cargo, said the German carrier had not observed any “definitive behaviour” in contract patterns.
“We are seeing the entire range of reactions, from a ‘wait-and-see’ approach to chartering full aircraft for urgent shipments. The response is based on various factors, such as stocking/replenishing warehouses in various countries, and internal assessments of tariff timelines and levels,” she said.
Indeed, Mr Fried added that contract preference would depend on “what the individual needs are for the customer of the particular forwarder”.
“Maybe they have customers that say, ‘look, we don’t care what the cost is, we just have to get the goods there and it’s worth taking a block-space agreement’, and that’s their business, obviously.”
He suggested that even though forwarders might generally be taking a cautious approach to contract length, airlines were still keen for long-term commitments from forwarders.
“You want someone paying for that belly capacity, whether they use it or not,” he explained.
“But the reality is that if you stop de minimis and you start raising tariffs, demand is going to cease. I wish the president understood that, but maybe that’s part of the strategy,” he concluded.
