PPE fuelling air freight congestion in China and Europe

5/17/2020

The huge demand for PPE, face masks and other medical equipment that has been driving air freight demand from China, and looks set to persist for several more months, is contributing to congestion at Chinese and European airports, exacerbated by limited capacity and strict new Chinese export controls.

According to freight forwarding and air cargo sources, there has been congestion for several weeks at key export cargo airports in China, notably at Shanghai Pudong Airport, that worsened in the days leading up to China’s early May holiday period, with some also highlighting Guangzhou, Zhengzhou, Shenzhen and Xiamen airports.

And the high levels of import demand have also led congestion at certain import gateways, with some highlighting Europe’s largest cargo airport Frankfurt as facing particular challenges in the last few weeks, although cargo handlers at other airports were also caught out in the second half of April.

Frankfurt Airport operator Fraport confirmed to Lloyd’s Loading List that it has been “experiencing particularly high import volumes over the last weeks”, but also highlighting that nature and “structure” of the freight had changed, “including the doubling of the number of loose packages”.

A Fraport spokesperson told Lloyd’s Loading List: “Higher than expected import volumes were again processed last weekend. The handling companies are actively managing which charter handling requests can be accepted so as not to jeopardise warehouse performance. This leads to a more balanced utilisation, including freight handlers in the ‘second row’ – i.e. those without direct airside access.”

That has been necessary because there has been so many charter flights landing at the airport, including several cases where the charter airlines did not even know which local handling agent would receive their freight upon arrival.

The airport said the airport and its stakeholders had been cooperating on a community level, noting: “Representatives of the Air Cargo Community Frankfurt remain in close contact in order to maintain the flow of cargo at CargoCity South. Frankfurt is able to handle the current freight volume; however, the companies continue to face unusual freight structures and very high numbers of packages.”

One problem has been that some companies and individuals collecting import shipments of PPE are said to have little or no experience in logistics and air freight and are unfamiliar with customs issues, documentation and proceedings common at airports. 

Fraport confirmed that “many new cargo partners continue to be involved in the handling of the goods”, and said the fluctuations in the collection of the import freight continue. We therefore appeal to everyone involved – especially with regard to the upcoming long holiday weekends – to make the best possible contribution to document quality and to a continuous flow of freight and therefore avoiding unnecessary waiting times.”

The airport said all of the parties involved in air freight at Frankfurt “have taken a lot of measures to minimize the challenges. In an attempt to improve the infrastructure support for drivers, Fraport AG, for example, precautions have been taken to make overflow parking spaces for trucks available. Also, the canteen in CargoCity South is now additionally open between 4 pm and 8 pm from Monday to Friday extending the current lunchtime operating hours. This also means that additional sanitary facilities are now available.”

Air freight handler FCS Frankfurt Cargo Services, underlined to Lloyd’s Loading List that due to the coronavirus pandemic, several hundred tonnes of urgently needed medical supplies are handled at Frankfurt Airport every week, adding: “As a result, the import volume at Frankfurt Airport is currently particularly high – with about double the amount of parcels, which requires lot of manpower resources. There are the first signals from the logistics industry that the tip of the iceberg may be reached, but volumes remain volatile.”

However, FCS stressed that “to cope with the current high and differently composed freight volume, a strong cooperation of all parties involved is indispensable”.

It said FCS had taken measures to accelerate processes for waiting drivers during peak times, adding: “The company has implemented a new queueing system for drivers including a pre-registration process to minimize the waiting time temporarily being experienced. FCS supervisors and security personnel was assigned to assist in front of the office. In addition, the programming of an SMS-based notification tool has been commissioned, with the aim of further minimizing the waiting times. An introduction is planned latest until early June.

“Furthermore, FCS appeals to their partners to work together to achieve a balance in collection and to improve the coordination of processes. For this reason, collectors were asked to pick up their shipments continuously, even over holidays and weekends after low pick-ups were monitored over the weekend which resulted in a peak of arriving drivers after the weekend. FCS is available around the clock, seven days a week.”

FCS said it had also taken measures with personnel service providers “to support the permanent staff; and the partner companies support each other to the best of their ability”.

In order to accelerate truck loading and unloading, and for reasons of infection protection, FCS said it is recommending the delivery of pre-assembled units for export, or alternatively palletised shipments. “Furthermore, forwarding agents are asked to discuss similar options at departure stations and, if possible, minimise the loading of loose freight,” it added.

A spokesperson concluded: “FCS remains in close contact with Fraport, the Air Cargo Community and their partners to maintain the flow of cargo at Cargo City South. Even though times are challenging, Frankfurt is able to handle the current freight volume thanks to established processes and close communication between the partners.”

Jason Breakwell, commercial director for European air freight road feeder specialist Wallenborn, told Lloyd’s Loading List that there was no doubt that many handling operators were caught out in the second half of April, adding: “It was not only because volumes were higher than expected but was also due to higher piece counts, longer storage times, and poorly packaged shipments. Handlers are bringing staff back from furlough and re-opening or adding handling and storage capacity.”

Commenting on congestion on the export side in China, UK freight forwarder Norman Global Logistics noted that in addition to Shanghai, “Guangzhou, Zhengzhou, Shenzhen and Xiamen have been very busy, and will remain hot spots for some time yet”.

Stefan Holmqvist, MD for Norman Global Logistics Asia, said: “Before the (1-5 May) holiday, it was as bad as it could get. There were huge truck queues and congestion at warehouses in Pudong. There were long waiting times and a lot of cargo couldn’t catch flights. That crazy situation has improved somewhat, but it is still very congested.”

He said there had been “significant delays at Shanghai, with some aircraft flying out empty over the Labour Day holiday”, with the delays caused by the strict new customs inspections of PPE exports by China.

He added: “Even though customs inspection waiting time is now five or six hours, rather than the 48 hours experienced during the peak of the congestion, we are delivering cargo five days in advance of flights, to allow plenty of time for any inspections and to ensure safe departure.”

He said that the tighter export controls “are making it very difficult to transfer cargo to Hong Kong, so most PPE must go through mainland airports”, adding: “We are working with our colleagues in China, to monitor the situation closely and will continue to use a mix of air, sea-air and rail services to offer the most cost-effective transport solutions and avoid congestion.”

According to freight forwarder Agility, the latest figures from Seabury indicate that global air cargo capacity was 25% below levels for the same week in 2019, with transpacific air cargo capacity now up 9% to 18% compared with last year, and Asia Pacific-Europe capacity returned nearly to 2019 capacity levels. Transatlantic capacity was down more than 50% from 2019 levels.

Global widebody belly capacity is down 78% from 2019 levels but has increased 30% in the past two weeks, with freighter capacity is 28% ahead of 2019 levels, Seabury says.

In the past two weeks, Agility said capacity has been increasing across most lanes. It said transpacific capacity “has grown largely because of PPE shipments carried on passenger freighters. Week-on-week widebody belly increases were largest on Asia Pacific-N. America (71%), Intra-Europe (74%) and Latin America-N. America (68%) lanes; and for freighters on the Latin America-N. America (27%), according to Seabury.

It said belly capacity from China was “rebounding, and freighter capacity is showing large week-to-week gains”, noting that Boeing 777 and 787, and Airbus 330 are the aircraft deployed most for passenger freighters, according to Seabury.