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    The Coronavirus pandemic is having a huge impact on the air freight industry. Demand is down 20 percent from last year.

    AIR FREIGHT MARKET OUTLOOK

     

    Airfreight rates from key Asian hubs continued to climb last week as ocean capacity shortages and personal protective equipment shipments increased.

    The latest figures from TAC Index show that average airfreight rates from Hong Kong to North America last week climbed for the fourth week in a row as they increased by 4.6% week on week.

     

    From Shanghai to North America, average prices increased for the second week in a row as they jumped by 10.2% on a week earlier. From Hong Kong to Europe there was a 1.5% decline but from Shanghai to Europe there was a 14.8% increase.

     

    Rates continue to track ahead of last year’s levels but they are down on the high levels recorded in mid-May. Ocean capacity shortages could be having an impact on the market (see below).

     

    The high rates and additional lead times to ship by ocean are pushing some time-sensitive shippers from ocean to air, contributing — together with the increase in personal protective equipment demand and peak season electronics — to the recent increase in air rates.

     

    Besides,  electronic product launches are beginning to affect the market, along with an uncertain capacity outlook.

    Rates remain way above last year’s levels.

     

    SEA FREIGHT MARKET OUTLOOK

    Global container demand lost 4.4 million TEU’s and reached 50 million TEU’s YTD April 2020.

    Year in Year demand dropped by 16.7%

    Sea freight carriers have put in place massive blank sailings in the second quarter, and this will continue in the third quarter of 2020 in order to avoid a collapse of sea freight rates. This has created an artificial shortage of capacity, putting pressure on rates. The very strong dynamic of supply and demand controlled by ocean carriers is pushing rates to be stronger in Q3.

     

    Space restrictions due to void sailings remain the main issue for Q3 of 2020. This market trend will lead to more delays, disruptions and higher ocean rates.

     

    On the Asia/Europe and Asia / North America trade lanes, 15% more capacity will be removed from the market through August. The number of blank capacity is announced to reach 4 million TEU’s. Ocean carriers justify these additional void sailings by data and information they got from most retailers about their purchases in Asia. 

     

    They want to ensure a sustainable rate level by creating an artificial shortage of capacity.

     

    AFG alternatives:

    Asteelflash consol box from Hong Kong to Europe is working normally. There are charter flights out of China to Europe and USA (price upon request) and vice versa with our Global Approved Carriers. There are charter flights out of Europe to USA and vice versa (price upon request) with our Global Approved Carriers. 

    There is also the rail road alternative from Asia to Europe

     

     

    July 28th 2020 :

    AIR FREIGHT MARKET OUTLOOK

    The coronavirus pandemic is having a huge impact on the air freight industry. Demand for air freight services is down 20 percent from last year. At the same time, there was and still is much less capacity available on the market, owing in part to the fact that sometimes only just fewer than 10% of the usual volume of passengers have been flying at peak times.

    The airlines cut their flight schedules back to a minimum, which meant that belly capacity was also reduced.

     

    As of today, experts assume that the shortage will become even more acute as the economy slowly starts to recover, because it will take some time for the airlines to return to operating at their usual capacity.

     

    It is also being said it will take at least three years for the airline industry to return to the level it was at before the Covid-19 outbreak. Many airlines are in a critical financial situation, and airports are set to see some shifts as well. Airlines will concentrate on a few large airports and will no longer serve every small airport. There are fewer routes, and accordingly, fewer capacities and departure options on the market.

    Besides, passenger traffic will be impacted, too. It is generally expected that passenger traffic in 2021 will be between 32 and 41 % lower than the level originally forecast. This means that capacities of cargo shipped in passenger planes will be reduced as well.

     

    Airfreight rates out of major Asian origins to North America showed signs of increase last week as demand showed signs of picking up.

    Figures from data provider TAC Index show that the average airfreight rates from Shanghai to North America, last week, increased by 9.7% compared with a week earlier, which is the highest level in seven weeks.

    From Hong Kong to North America average rates increased for the second week in a row, this time jumping by 6.4%.

     

    Rates remain way above last year’s levels.

    Besides, it is expected that airfreight rates will rise over the coming weeks as a result of reduced capacity and increasing demand: the catalyst is a relatively stable commercial demand coupled with reduced capacities driven by freighter maintenance cycles and higher fuel costs that are reducing the number of flights by passenger freighters.

    In addition, there has been a bump in demand for personal protective equipment (PPE) in the US as virus cases increased there.

    Air cargo rates from China to the US ticked up this week due to tighter capacity as few converted passenger jets are still in use, and new restrictions on US crews arriving in Hong Kong has led to US carrier cancellations.

    This bump is driven by a jump in PPE demand as the virus surges in the US and the scheduled fall rollouts of consumer tech like the new iPhone and PlayStation.

     

    AFG alternatives:

    Asteelflash consol box from Hong Kong to Europe is working normally. There are charter flights out of China to Europe and USA (price upon request) and vice versa with our Global Approved Carriers. There are charter flights out of Europe to USA and vice versa (price upon request) with our Global Approved Carriers.  There is also the rail road alternative from Asia to Europe

    Collaboration réussie pour la fabrication de badge COVID avec Zozio!

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