Air freight & coronavirus contingency planning

AirfreightThe information below about air freight is from American Shipper and important to consider for supply chain planning.

Finding all-cargo aircraft with room to move goods from China to international customers could be difficult for manufacturers and retailers once factories there start reopening this week. With most airlines shelving passenger flights because of the coronavirus epidemic, analysts expect airfreight rates to spike.

More than 40 airlines have suspended passenger operations to and from mainland China, eliminating about 25,000 flights per week, according to data aggregator OAG Aviation Worldwide. Flight suspensions, many of which are scheduled to last through March, are now creeping into Hong Kong, too.

The passenger pull-down means 40 to 45% of air cargo capacity on major east-west trade lanes has disappeared in a market in which outbound load factors often are 100%. Shippers like the daily frequency and reliability of passenger flights to move perishables and high-value goods.

Some logistics providers say they are seeing higher rates on airfreight moving out of China and Hong Kong, while inbound rates on certain routes are also up due to the surge in medical supplies being sent to the outbreak zone. Charters have largely dominated the inbound traffic.

All-cargo carriers will probably take a wait-and-see approach toward adding extra flights depending on how fast manufacturing ramps up in the next few weeks. For importers it’s best to plan for additional airfreight costs and possible delays due to very tight capacity.

Contact your Cargo Services representative for questions about your shipment as it pertains to this article and information.

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