Cuts to passenger flights send air freight rates soaring as manufacturing resumes in China
- China-US cargo rates have risen by 27 per cent over the last two weeks to more than US$3.50 a kilogram, key index shows
- China’s air cargo capacity was down 39 per cent in February compared to last year because of the passenger flight cuts, according to Agility Logistics
Air freight rates are skyrocketing after the grounding of many passenger flights in Asia has left shippers scrambling to book limited spots on cargo planes as Chinese industrial production restarts, according to industry insiders.
About half of the air cargo carried worldwide normally flies in the belly of passenger jets rather than in dedicated freighters. But deep flight cuts in response to the coronavirus outbreak have made the market more dependent on freight haulers.
Freight forwarder Agility Logistics said on its website that China’s air cargo capacity was down 39 per cent in February relative to last year because of the passenger flight cuts.
Shippers wishing to rush products out of China by air face sticker shock, said Refael Elbaz, CEO of Israel-based Unicargo, which specialises in freight forwarding for Amazon.com sellers.
“The price is three times higher – at least – because there is just no capacity,” Elbaz said.
Freight Investor Services said in an update to clients on Monday that cargo pricing on China-to-US routes had reached “abnormal highs” and that intra-Asia traffic was up by 22 per cent over the previous week. TAC Index data shows China-US cargo rates have risen by 27 per cent over the last two weeks to more than US$3.50 a kilogram.