While airlines enact drastic cuts in their passenger services in response to COVID-19, air freight continues to move via freighter charters and pax aircraft in cargo-only mode but such contingency plans have resulted in significant rate hikes, feedback from industry sources reveals.
Demand for freighters is currently “extraordinarily high,” according to leading air charter broker, Air Charter Services, principally due to the resurgence in production in China as the spread of the coronavirus stabilises, coupled with a severe shortage of bellycargo capacity following the suspension of airline passenger services on Chinese routes.
The US travel ban on European countries is also contributing to the rush to secure maindeck solutions as up to 80% of freight on the transatlantic lane is transported aboard pax aircraft.
While outbound flights from China are the most popular, there are also a significant number of flights going the other way as well, from Europe and the US, as well as trans-Atlantic flights.
ACS points to quotes of over US$1 million (per freighter flight) for anything that's transpacific, such as China to the US, when the normal rate is around half of that.
However, the company warned that there is the prospect of the market for all-cargo planes tailing off markedly in the coming weeks as economic activity slows in Europe and US as plants shut down amid government measures to contain Covid-19 by confining workers at home.
In a COVID-19 customer advisory updated earlier today, German forwarding and logistics group DB Schenker said: “As of this past weekend, the capacity supply situation relies now on pure passenger cargo flights' from airlines to transport the most critical goods between countries.
“Capacity access on freighter aircraft reached the highest demand levels, especially out of China with increasing demand. Additionally, some major airlines have now also taken the final decision to ground their entire passenger aircraft fleet based on the low level of demand for international travel due to passenger travel immigration embargoes.”
The company has put a flight operations schedule in place for a consolidated charter on the Europe-India-Europe route with connections from and to the US via Europe.
It is already operating a programme of scheduled freighter charter flights which includes Europe- China-Europe (three-times weekly flights with B747-400F aircraft), Hong Kong-Europe (twice-weekly flights with B747-400F), China-US (three-times weekly flights with B747-400F) and Europe-US-Europe (three-times weekly flights (with MD11F and B747-400F)
Further flights are being evaluated to increase the coverage of alternative capacity solutions, it added.
Meanwhile, having slashed passenger services in response to COVID-19, an increasing number of airlines are turning to pax aircraft to maintain a cargo offering.
United Airlines has announced that it will use some of its Boeing 777 and 787 fleet to initially operate a schedule of 40 cargo charters each week targeting international destinations and will continue to seek additional opportunities. The first of these freight-only flights departed late last week from Chicago O'Hare to Frankfurt.
The US carrier said: “With coronavirus (COVID-19) creating an increased need to keep the global supply chain moving, we are utilizing our network capabilities and personnel to get vital shipments, such as medical supplies, to areas that need them most.”
United Cargo president Jan Krems commented: "Connecting products to people around the world is the United Cargo mission. That role has never been more crucial than during the current crisis. Our team is working around the clock to provide innovative solutions for our customers and support the global community."
American Airlines is also utilizing its currently grounded passenger aircraft to move cargo between the US and Europe. A B777-300 operated two round trips between Dallas Fort Worth and Frankfurt last weekend, carrying medical supplies, mail for active US military, telecommunications equipment and electronics to support people working from home, and e-commerce packages, it said
Delta Cargo is also launching charter operations from 13 US airports. Two flights will operate this week between Dublin and Atlanta.
Meanwhile, in an update to customers issued earlier today, Cathay Pacific Cargo said its teams “have worked hard to retain as many cargo-only passenger services to supplement the skeleton passenger schedule and enable us to continue serving our customers.”
It released a schedule which includes normal passenger services as well as cargo-only passenger flights from Hong Kong to mainland China, Taipei, Tokyo, Osaka, several destinations in south-east Asia, Sydney, Delhi, Los Angeles, New York, Boston, Vancouver, London, Manchester, Paris, Frankfurt and Zurich. “Our freighters continue to operate as per our latest schedule,” it added.
ACS noted that for carriers with no freighter activity and who are burdened with the high costs of having their fleets grounded, pax aircraft in cargo-only mode was an opportunity of generating revenue – very likely at premium prices – provided that the demand was there.
In its latest special report on the impact of the coronavirus pandemic, DHL’s supply chain risk management platform, Resilience360, underlined that the US travel ban on non-US citizens from Europe, leading to massive cuts in airlines’ transatlantic passenger services and their bellyhold cargo capacity, “has already caused shipping rates to increase to unprecedented levels”.
Even before the extension of the US travel ban on citizens from continental Europe extending to citizens from the United Kingdom on 13 March, forwarders reported rates of US$7.24 to US$11.14/kg out of the UK into the US, while the normal rate applied would typically be around US$0.80/kg, it noted.
“Rates could similarly increase for connections from Europe to Canada or Mexico in the coming days as forwarders explore alternative ways of getting cargo into the US. Due to the constantly evolving situation, carriers may stop existing bookings as applicable rates are likely to change on a daily basis, refuse to take forward bookings, and implement penalties for no-shows.”
