Workers unload cargo from an airplane at Shijiazhuang Zhengding International Airport in Shijiazhuang, Hebei Province on Nov. 12 during the Alibaba Group’s Double 11 global shopping festival, which begins Nov. 1. [Photo/Xinhua]
If “nothing is normal” due to COVID-19, the civil aviation industry will find a lifeline for revenue and growth impulses in air freight
When the COVID-19 pandemic made travel restrictions the norm last year, restricting commercial flights, causing the largest decline in the civil aviation industry worldwide since the 1950s, and causing net losses of $ 126.4 billion, airlines were caught by surprise and fought to stay afloat.
However, the industry found that the dark cloud did have a silver lining: rapid growth in air cargo due to the huge demand to keep goods, especially medical supplies and essentials, moving no matter what.
The focus on freight traffic since the beginning of COVID-19 has had a tremendous impact not only on the aviation industry, but also on global supply chains, helping to transform related systems, technologies, investment patterns and future prospects.
The first half of this year offered the first glimmer of hope. According to the International Air Transport Association, air freight recorded the strongest growth in the first half of the year since 2017.
IATA data also showed that demand for air freight was primarily for the transportation of vaccines, personal protective equipment and vital medical supplies. At the end of 2020, the industry-wide freight tonne-kilometers were again close to the pre-crisis values. (Ton-km is a unit of measurement for cargo handling. For example, 2 tons of cargo transported over 2 km would be 4 ton-km.)
Last year, Federal Express, United Parcel Service, Qatar Airways, Emirates and Cathay Pacific Airways were the top five airlines by scheduled freight tonne kilometers.
IATA General Manager Willie Walsh said, “Airfreight is doing brisk business as the global economy continues to recover from the COVID-19 crisis. With demand growing 8 percent above pre-crisis levels in the first half of the year, air freight is a win. Lifeline for many airlines struggling with border closings that continue to devastate the international passenger business. It is important that the strong performance is expected to continue in the first half of the year. “
In China, the volume of air freight and mail transports reached 3.74 million tons in the first half of the year, 24.6 percent more than in the previous year. This included the air transport volume of exclusive cargo planes, which, according to the Chinese Civil Aviation Authority, reached 1.52 million tons, an increase of 44.2 percent over the same period in 2019.
Air freight rates on the Trans-Pacific and Asia-Europe trade routes rose by 20 to 40 percent in August and are expected to continue to rise after new measures to contain the new COVID-19 cases were taken at Pudong International Airport in Shanghai in mid-August, so a report by Air Cargo World.
The air freight sector entered its busy season earlier this month. The peak of demand usually lasts until the end of the year. The prices will fluctuate at a high level, industry experts observed.
Due to the reduced capacity at Pudong Airport, carriers see longer transit times than normal as the cargo waits for departures.
Flexport, a San Francisco-based global logistics platform company, expects air freight prices to and from China to remain at current high levels, if not higher, as capacities in the Chinese market continue to be reduced.
Henry Ko, Managing Director of Flexport Asia, said: “This is of course compounded by the normal volume pressures during peak season. Normally, prices would go down by the end of the year and into January, but we’ve learned that nothing is normal here. ”Therefore, predictions are difficult. We will constantly review and balance our supply and demand in order to optimize performance and keep our customers’ valuable cargo moving. “
Qi Qi, an independent aviation industry analyst, said Shanghai Pudong International Airport is the largest international air cargo port in China, but when COVID-19 cases emerged from the airport’s international cargo area, it had a negative impact on cargo handling efficiency and suppressed it the freight distribution system.
“In the short term, supply will lag behind demand, which will lead to higher freight rates. Freight rates are unlikely to remain high in the medium to long term. Air cargo capacity at Pudong International Airport is expected to return to normal after the pandemic is better controlled, “Qi said.
Wang Jiangmin, a civil aviation commentator for China Southern Airlines, said, “Air freight transportation prices have increased due to the reduced number of flights due to the pandemic. The strict pandemic prevention measures and the freight backlog have exacerbated the situation. “
Rising freight rates in the relatively slower shipping sector also drove air freight demand up in the already tense situation.
On September 10th, the Shanghai Export Containerized Freight Index, a measure of the actual sea freight rates of the main Chinese ports, reached a record high of 4,568.18 points.