President Biden’s plan to save Christmas by declogging Los Angeles and Long Beach ports has failed. The number of container ships anchored off the coast remains near record highs, and wait times to unload cargo is around three weeks.
Some importers have opted out of the usual containerized shipping via ocean vessels for air freighters to ensure their goods make it to store shelves in time for the holidays.
Over the past three months, air freight rates on major shipping routes to and from China have doubled.
FT reports air freight rates between Shanghai to North America hit a record high of $14 per kilogram last week, up from $8 at the end of August. It even surpassed COVID highs of $12 when the entire world was using air freighters to ship medical goods worldwide during the early months of the pandemic. Similar routes such as Hong Kong to Europe and the US and transatlantic routes between the Europe and North America have experienced dramatic increases.
“Everyone knows if they want something on to the shelves before Christmas, they have to use air freight,” said Yngve Ruud, head of global airfreight at Kuehne+Nagel, one of the world’s largest freight forwarders.
Biden’s effort to reduce dwell times is not working, even after he announced a new directive for the twin ports in mid-October to operate on a 24/7 basis. We noted at the time, in a piece titled “Here’s The Truth Behind Biden’s 24/7 Port Operations Pledge,” that the move would not save Christmas. It now takes 21 days, or three weeks, for a vessel to enter the twin ports, that’s up from seven in August.
Widespread supply-chain disruptions on major ocean shipping lanes have been a boon for air freighters. Top US importers have switched to air freight for high-value items. The extra shipping costs via air are being passed onto the consumer through inflation.
Some airlines have converted their planes into air-freighters to take advantage of the heightened demand for the expedient but costly service.
The cost of air freight will make some goods much more expensive this holiday season, as the relief for snarled supply chains might not be seen until the second half of 2022.
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