Airlines have reported a renewed interest in block space agreements (BSAs) as forwarders prepare for a potential spike in airfreight rates later this year. While some in the industry remain cautious due to ongoing trade uncertainties, others are locking in rates now as a measure of security against price surges down the line.

Many airfreight forwarders have been hesitant to commit to long-term BSAs due to fluctuating demand linked to trade tariffs. Brandon Fried, executive director of the Air Forwarders Association, explained that the temporary 90-day tariff pause has made forwarders wary as shifting policies make future demand unpredictable. “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,” he said.

However, Richard Forson, CEO of Cargolux, shared a different view. Speaking at the Transport Logistic conference in Munich, he said Cargolux had seen strong BSA renewals under standard terms. Forson believes the COVID years and the ecommerce surge in 2024 taught forwarders the value of certainty.

Mark Drusch, Chief Cargo Officer at Qatar Airways, also sees a demand spike and subsequent rate hikes coming. However, Qatar Airways is not rushing into long-term deals either due to the global uncertainty. “Everybody is worried. It’s not just China-U.S. that’s put a crimp on everything. And I think once it gets settled, you’ll see everything go back, not to normal, because there’s that pent-up demand that you’ll have to satisfy,” Drusch added.

Forson acknowledged that BSAs carry a risk for all parties. As he explained, both sides are betting on where the market will land at the end of the year.

Source: The Loadstar