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With ocean shipping rates soaring, transporters are increasingly looking to the air to move goods, Sourcing Journal reports.

What’s going on: As continued Houthi terrorist attacks in the Red Sea force container shipping firms to divert their routes, “[a]ir cargo demand saw its strongest year-over-year growth in almost two years in November.”

• It rose “8.3% to 22.4 billion cargo to-kilometers over the year prior, according to data from the International Air Transport Association.”
• November was the fourth month in a row in which air cargo demand increased.

Who’s doing it: Companies shipping from Asia to Europe are increasingly turning to air freight, and those looking to transport goods from Asia to the U.S. will likely soon do the same, one logistics company executive told the publication.

Why it’s important: “Although demand is expected to rise, air freight rates are still working in shippers’ favor. As of Wednesday, the China-to-Northern Europe weekly price fell 25% to $2.98/kg, according to the Freightos Air Index. China-to-North America prices stayed level at $5.85/kg, while Northern Europe-to-North America weekly prices fell 13% to $1.82/kg.”

• Ocean spot freight rates, meanwhile, were up more than 100% in two Asia-to-Europe routes last week, and “[a]cross all lanes, spot rates jumped 61% to $2,670 per container.”

What’s next: Demand for air freight is still below pre-pandemic levels, though that may not last. Importers are stocking inventory ahead of the Lunar New Year next month when Chinese factories shut down for two weeks.