Air freight from India to key destinations like the US, Canada and Europe has more than doubled in the last three months due to disruption in global shipping following the Red Sea crisis. This is affecting sectors like leather, textile, pharma and food.
Three months ago, air freight from Chennai to Munich used to be ₹96 per kg but has increased to around ₹250 now. Similarly, air freight to the US and Canada has increased to ₹400 per kg as against ₹170 to ₹190 three months ago, said Israr Ahmed, Director at Farida Group, a leading exporter of leather products from Chennai.
Further, as the air freights are high to the US, the airlines are less willing to take on board cargo for transshipment hubs like Hong Kong or Singapore as the freight is as low as ₹38 or ₹40 per kg. They are giving priority to destinations in the US, Canada or Europe, said Ahmed, who is also the Vice President of FIEO.
Supply chain issues
Disruption in the Red Sea is causing a huge supply chain problem, and some of the time bound and high value cargo is getting diverted from sea to air, he said.
J Krishnan of S Natesa Iyer Logistics LLP, a leading freight forwarder, agreeing with Ahmed said there is a huge capacity crunch in the airlines carrying cargo. While most of the cargo is carried in the belly, some of the airlines like Singapore Airlines, Cathay Pacific, Lufthansa and Qatar Airlines, do operate freighters. However, the demand is outstripping the supply, he said. Most orders are planned by sea but disruptions change the mode of shipment, he added.
Complicating things further, huge consignment of garments from Bangladesh is arriving at Delhi for air evacuation to global destinations. There is capacity crunch on both modes out of Bangladesh, which is one of the leading exporters of garments.
India has a trade agreement for sealed export cargo from Dhaka to directly arrive at Delhi Airport with minimal border checks, he said. “The current situation is one more stark example of the problem of Indian trade, due to lack of national capacity,” he added.
An official with an airline on the increase said it is about demand and supply, and the fare drops or increases accordingly.
