In face of the continued disruption of air traffic due to the unprecedented rise in Covid-19 cases globally, Agility has released a comprehensive air freight operational report. The report states: transatlantic trade lanes are showing significant declines. Europe – USA belly capacity has dropped by nearly 90% and continue to see capacity shortages and considerable increases to spot price rates. Also, due to reduction in passenger flights, significant capacity constraints are being observed in Europe- South East Asia trades
Belly capacity declines have occurred across key cargo airports in Europe and across Asia and North America, according to Seabury Consulting. Significant capacity constraints are seen at Europe-China and Europe-Middle East trades along with surge in rates. Widespread travel restrictions in the Middle East have reduced capacity largely to freighters in markets across the region.
China is nearing full production by the end of March, and an increased number of freighter flights in the market are helping ease the outbound China capacity strain. While passenger flight capacity is still squeezed, freighter capacity is now 1,300 tonnes higher than the same period last year, according to Seabury. However, outbound air freight capacity is under tremendous pressure among all mainland China export markets as production resumes and passenger flight cancellations are sustained.
All major Asian airports are showing declines in cargo capacity. Hong Kong, Shanghai and Beijing showed the largest declines in cargo capacity. And air freight rates on Intra-Asia lanes are extremely high, volatile and have been increasing rapidly, which are in turn constraining the long-haul export capacity to both Europe and the US.
In the South East Asian market, Singapore’s cargo terminals are impacted by both restrictions and manpower reductions; Vietnam suspended all international flights as of March 21, Malaysia closed its borders on March 18.
There are no restrictions on cargo movement, and freighters continue to fly across the Arabian Gulf. Some passenger aircraft from carriers across the region are now being converted into temporary freighters.
In the Middle East and Africa region, carriers are operating scheduled freighters, while cargo is moving on an ad-hoc / unscheduled freighter or charter basis. The report said that in both the regions committed capacity can no longer be guaranteed and suspension of all contractual rates and tariffs has been observed. Rates for charters have doubled, and in many cases, are higher than that. Air freight rates have reached unprecedented levels. Premiums must be paid to get cargo uplifted on a priority basis.