PPE air freight boom set to continue for months

5/11/2020

Air cargo shipments from China to Europe of medical supplies and equipment to combat COVID-19 are set to continue well into the second half of the year, according to a leading air charter broker.

“I am expecting this ‘continuous flow’ of PPE imports from China to be kept up for at least the next 2-3 months as so far it seems that only hospitals and ‘essential’ workers are starting to receive their supplies,” Chapman Freeborn’s head of cargo, Pierre Van Der Stichele, told Lloyd’s Loading List in an interview.

He said the general public would need to have access to their own PPE if the general lockdown was progressively lifted, creating even greater demand.

“Also, PPE is a somewhat ‘perishable' item as most protection gear is meant to have a limited lifespan before replacement, so the flow from China and the Far East will continue for quite some time I reckon,” he added.

Commenting on the current supply and demand situation for air cargo charters transporting coronavirus relief supplies, Van Der Stichele said that there had been “a slight change last week with fewer ‘pure’ cargo aircraft to offer, as most are sold-out 3-4 weeks in advance. 

“Last week, was the Labour Day (holiday break) in China, so there was a general slowdown,” he said. “But also Chinese airports are now experiencing congestion, possibly due to a limited number of staff and vast amounts of freight to handle.”

One marked development, he said, was the increasing use of passenger aircraft in cargo-only mode – with shipments carried in bellyholds and cabins. 

“We’ve used wide-body aircraft from major carriers, such as B777-200s, B777-300s, A330s, and A340s, which can offer on average 200 m3 of space for COVID-19-related cargo which is generally volumetric”, he noted.

“Smaller aircraft such as A321s and A320s are also well-suited, as well as being cost-effective for this kind of shipment and can uplift 110 m3 in connecting China with Northern Europe.” 

Pricing beginning to plateau

Asked whether pricing from China was now beginning to plateau, as feedback from the market suggested, Van Der Stichele replied: “Yes, I think so.” 

He went on to play down reports from forwarder sources that spot rates ex-China have in some instances reached $18/kilo to destinations in Europe and the US, but confirmed that the going price for a wide-body freighter charter flight remained well over $1 million.

“$18/kilo is a little exaggerated,” he added. “I would say a good average is $13/kg on the chargeable weight. Prices to the U.S. (per flight) are generally in the region of $1.1 million- $1.3 million for let’s say a B777F or B747F aircraft type.”

Commenting on one charter flight allegedly agreed for $1.7 million, he noted: “It’s possible. Such a price could be from China to Argentina.”

Van Der Stichele added that the supplemental cargo capacity provided by passenger aircraft ‘freighters’ “has not affected the prices yet.”

Asked about the prospect of more freighter capacity coming into the market, with Atlas Air reported to have brought two of its four grounded B747-400 freighters back into service to operate flights between China and the US, and UK-based CargologicAir looking to take to the skies again, he said: “I don’t think this will help sort out the (capacity) problems, nor make a significant impact.”