Falling demand for air cargo capacity from China and Hong Kong has led to the start of “a more regular pattern” for commercial air cargo, in which the elevated rates of recent weeks begin to descend to more normal levels, according to US freight forwarder Flexport.
Flexport also said that the large numbers of ‘preighters’ – passenger aircraft flown purely for their cargo capacity – that airlines have been flying in recent weeks in response to the rush globally for personal protective equipment (PPE) from China “are expected to be retired through the summer”, with analysis by Seabury Consulting indicating that there has already been a drop in ‘passenger freighter’ capacity ex-China during the last two weeks.
The US forwarder noted that the majority of US airlines have announced June schedules “that are more robust than their May schedules, and include international routes”. It noted that increasing passenger flight routes “indicate the slow but steady return for demand for these services. We expect this trend to continue over the summer, even as flight schedules remain well below pre-Covid levels”.
It also noted that air cargo ground handling delays had been “extreme” in the US in recent weeks, with some terminals at Chicago’s ORD airport and LA’s LAX “experiencing breakdown delays of 3–8 days after flight arrival”.
Looking at Europe, it noted that demand for air freight ex-Europe is slowly picking up, along with the number of spot rate requests. It said carriers are “slowly expanding their flight routes and schedules, although capacity remains tight”.
And looking at longer-term issues, Flexport also noted that the US State Department’s recent announcement to no longer recognise Hong Kong as autonomous from China “may have serious consequences for Hong Kong’s status as a trade and financial hub that will affect supply and demand dynamics for air freight in the region in the future.”
Seabury figures confirm trends
The latest update from global freight forwarder Agility, using data from Seabury, noted that for the third consecutive week, global air cargo capacity remained 26% below levels for the same period in 2019,with capacity on trade lanes to and from Asia better served than global averages. In the case of Asia-to-Americas, capacity was up 3% versus 2019 capacity levels.
It noted that ‘passenger freighter’ capacity declined last week, the first decrease after several weeks of increases, causing overall widebody belly capacity to fall by 4%, while freighter capacity remained stable, according to Seabury.
Seabury indicated that ‘passenger freight’ capacity was “cooling down” on most key lanes, including Intra-Middle East & South Asia; Latin America-North America; Asia Pacific-North America; and Intra-Asia Pacific.
It highlighted easing demand for PPE from China that “drove an 8% decline in passenger freighter capacity from China”.The decrease was largest for carriers from the Middle East & South Asia, and North America, Seabury said.
According to Seabury, China’s overall air cargo capacity is 7% above the levels seen in early January levels; South Korea capacity is 9% ahead of January levels; US capacity is down 38%; UK capacity is off 54%.
Seabury said China’s capacity recovery has been driven mainly by freighters, which have partially made up for a loss of widebody belly capacity from the US, Japan and South Korea, highlighting that a lack of freighter capacity has hurt the UK.