It is reported that the chaos and congestion of ports in South China have not yet had a significant impact on air cargo, but there was a dramatic drop in demand for air cargo at the end of May.

As air cargo enters the traditional low demand stage of the year, airlines are expected to cut capacity slightly.

A European freight forwarder said that in the last three weeks of May, "the air transport market outside China fell off the edge of a well-known cliff.".

"The rest of the world is still growing, small but at a reasonable level - Southeast Asia, the Indian subcontinent and Bangladesh are incredibly busy. There must have been some cancellations, or no operations at all, which stopped losses in the face of weak freight, reduced supply and rising demand. "

"Although June and July are traditionally the slowest months of the year, they are not as busy as expected, which should not be ignored."

He added that the Suez Canal Crisis in March witnessed "a lot of shipping difficulties due to delays" and that while congestion at Yantian and other ports in South China is expected to have a greater impact on the supply chain than the canal, he said there has been no model shift.

"It's strange that we don't see a lot of orders moving from sea to air at the moment." He said the price of air transport might have been "too high to be feasible or feasible.".

A Chinese freight forwarder in Shanghai said: "I don't think Yantian port congestion will lead to increased demand for air transport because of the huge price difference. I don't think a few shipments are so important that they need to be airlifted. "

Although freight rates slowed in May, they have remained stable since then, he said. But he added: "due to the current low price level, some airlines will suspend some of their regular 'passenger and cargo' services from July. In addition, some charter flights may be reduced or cancelled. "

"I think we'll see more of that in July and the first half of August. Then, due to reduced supply, we may expect prices to rise again. "

The air cargo market has become more difficult to analyze as Charter and passenger flights generate different rates. Charterers say they see an ongoing demand.

Mike hill, senior vice president of air partner Asia Pacific, said: "since the outbreak began, we have been booking charter flights, so there has been no change."“ In fact, since the beginning of the shipping dilemma of port congestion and container shortage, the only difference now is that these planes are rarely chartered for personal protective equipment, but for ordinary goods. "

"Compared with the price of freighter, the competition of passenger freighter to freighter for intensive cargo is very fierce."

He said that with the recovery after the Suez Canal blockade, the market fell briefly in May, with more freighters available for hire and lower costs.

He added: "however, the response of freight and passenger prices to market volatility seems to be less active. This may be novel coronavirus pneumonia after some restrictions were relaxed, more aircraft were modified, thereby reducing the capacity of some passenger cargo aircraft.

"At present, the competitiveness of passenger to cargo aircraft is not as important as before."

He said charter demand increased significantly in June, and air partner is looking for passenger freighters again due to the low availability of regular freighters“ We can expect freight rates to rise again. "

"It's hard to figure out the additional demand from harbour congestion," air charter service said

Source: sohang.com