1. What is the current air cargo situation?
Air cargo has ushered in the traditional peak season again. Not only has the volume of cargo increased sharply, but also the phenomenon of warehouse explosions and queues. The air freight prices of some routes have also increased or even doubled.
Katie Griley, vice president of operations at Griley Air Freight, revealed that the peak season is coming. Even if the cargo arrives at the local airport, it will take 4 to 8 hours for truck drivers to pick up the cargo from Los Angeles International Airport.
Query URL: https://www.newsbreak.com/news/2103446982404/peak-season-congestion-traps-truckers-for-hours-at-lax-cargo-terminals
In this regard, the International Air Cargo Association (IATA) stated that during the surge in e-commerce in recent months, the continuous shortage of capacity due to the lack of passenger aircraft services will cause a particularly serious blow to the air cargo industry.
So what is the current domestic situation?
An executive vice president of international freight in Shanghai said that it is now in the traditional peak season for air transportation, and the recent traffic jams and queues in the unloading area of the airport logistics storage area are very serious. The liquidation should start in mid-October, and not only the volume of cargo has increased significantly, but the freight prices of major routes have also increased a lot.
In fact, not only the domestic but also the international air cargo market has been in a high boom this year. The freight rate has also been at a high level for a long time. Some routes have also risen to the highest prices in history.
2. The reason for the explosion of air freight and the skyrocketing freight?
According to a report from CCTV Finance, Dexun Group East China Managing Director Fu Keqiang said that from the second quarter to the present, the four main products that have contributed to the growth of air freight are electronic products, e-commerce channel products, personal protective equipment and auto parts. , These four products accounted for the main growth factors.
Zhao Chao, a senior analyst in the transportation industry of Changjiang Securities, said that on the one hand, the shortage of transportation capacity is difficult to reverse in the short term. On the other hand, when consumption in Europe and the United States is the most prosperous, such as Christmas and other shopping seasons, the overall freight rate should still remain. The high position will continue to rise.
So how to explain to customers in English?
1. Peak season demand soars
Paul Molinaro, head of WHO's business support and logistics operations, told Reuters that a series of factors have driven prices up, including the higher-than-usual increase in e-commerce before Christmas.
According to the U.S. Department of Commerce, e-commerce sales in the United States in the third quarter increased by 37% compared with the same period in 2019. According to data collected by Buy Shares, online shopping spending during the Thanksgiving weekend (including Black Friday and Cyber Monday) increased by 20% to $29.6 billion.
Query URL: https://www.globaltimes.cn/content/1208780.shtml
According to data sent to the Global Times by cross-border e-commerce platform DHgate, shipments from China to the US accounted for approximately 68% of the platform's total sales in September. Peak season for Christmas decoration transportation. The best sellers are Santa sack, solar LED string lights, Christmas snowman, artificial flowers and Christmas masks.
We can tell our customers like this:
Airline body IATA’s chief economist Brian Pearce said that Christmas demand “exaggerates the problem” of a surge in demand for airfreight.
Airline International Air Transport Association (IATA) chief economist Brian Pearce (Brian Pearce) said that the demand for Christmas prompted the explosion of international air cargo.
The COVID-19 pandemic's impact on production in countries around the world and the nearing of Christmas, a peak season for export of Chinese products to Europe and the United States, were part of the reasons for the surge in demand for airfreight.
Due to the impact of the epidemic on the production of countries around the world and the approach of Christmas, which is the peak season for China’s exports to Europe and the United States, this is also part of the reason for the explosion of air cargo.
2. Insufficient capacity
Data from the global air cargo market showed that air cargo demand continued to grow in October, but the growth rate was lower than the previous month.
Website query: https://aircargoeye.com/air-cargo-facing-peak-season-capacity-crunch/
IATA Director-General and CEO Alexandre de Juniac (Alexandre de Juniac) pointed out that air cargo demand is picking up, and we believe this trend will continue into the fourth quarter.
We can tell our customers like this:
Alexandre de Juniac, IATA’s director general and chief executive, notes that the biggest problem for air cargo is the lack of capacity, as much of the passenger fleet remains grounded.That will likely be exaggerated with shoppers relying on e-commerce – 80 per cent of which is delivered by air.
IATA Director-General and CEO Alexander de Juniac said: The biggest problem with air cargo is insufficient capacity, because most passenger planes are still grounded. If shoppers continue to shop online, it is no exaggeration to say that 80% of them are delivered by air.
So, the capacity crunch from the grounded aircraft will hit particularly hard in the closing months of 2020 which were part of the reasons for the surge in demand for airfreight.
Therefore, in the months before 2020, the production capacity of grounded aircraft will be particularly severe, which is also part of the reason for the explosion of air cargo.
3. Soaring freight
It is reported that due to the impact of the epidemic, the United States announced restrictions on flights from Asia and Europe, which affected the capacity of transportation and hauling of goods. Global supply chain disruptions and restrictions have forced operators to rely on commercial aircraft, which has led to a sharp increase in the rates of all-cargo airlines.
Website query: https://www.supplychaindive.com/news/airfreight-cargo-rates-demand-climbs-near-peak-season/588619/
According to a report from the International Air Transport Association (IATA), the highly anticipated releases of electronic products such as the iPhone and Play Station 5 are traditionally shipped by air during Christmas and Black Friday.
Query URL: https://www.supplychaindive.com/news/ups-raises-surcharges-china-us/587260/
The increase in air freight demand before the holidays caused rates to soar again. From October 12th to November 9th, freight rates between China/Hong Kong and the United States increased by nearly 46%, reaching US$7.40 per kilogram, more than double the same period last year.
American Airlines President Robert Isom said last month: “From August to September alone, we doubled our cargo volume and operated 1,900 flights, serving 32 destinations in the third quarter. Provide services locally."
We can tell our customers like this:
A surge in demand for airfreight during the pandemic, coupled with peak season needs, has pushed UPS/Fedex/DHL to once again raise fees on goods flowing from China to the foreign countries.
The surge in demand for air transportation during the epidemic, coupled with peak season demand, prompted UPS/Fedex/DHL, etc. to once again increase the charges for goods from mainland China to other countries.
With holiday season upon us, shippers are yet again forced to shell out higher prices. Decreased capacity and higher rates have been a staple this year, causing fluctuating prices in air cargo especially, and in order to secure space, shippers have paid higher rates and additional surcharges.
With the advent of the holidays, shippers are again forced to pay higher prices. Declining capacity and rising tariffs are the main things this year, especially because of the fluctuations in air cargo prices. In order to ensure space, the shipper paid higher rates and surcharges.
The International Air Transport Association Brian Pearce said at a recent press conference that all signs indicate that air cargo volumes will continue to grow for the rest of the year. And manufacturers (the main driving force of air transport) are particularly bullish. In response to this situation, what are the current measures taken by all parties?
3. What are the measures taken by all parties?
domestic
Faced with the huge increase in demand for international air cargo, airlines have also increased the delivery of international cargo flights . According to statistics, China's international cargo flights increased substantially at the end of October, reaching about 2.3 times the same period last year. All airlines have invested more cargo capacity, and the frequency of both all-cargo aircraft and "passenger-to-cargo" aircraft has increased significantly.
Wang Jianmin, deputy general manager of Eastern Airlines Logistics Co., Ltd., said that the number of "passenger-to-cargo" flights increased significantly in October and November, and there were more than 100 more flights in October compared with September. In November, the number of "passenger-to-cargo" flights increased to 1,000. Around, a substantial increase from October. In November, the utilization rate of freighters reached a peak of 14 hours per day, and some exceeded 14 hours.
foreign
Lu Dongmei, China's chief representative of Lufthansa, said that in order to meet the growing demand for cargo capacity, Lufthansa has turned passenger planes into cargo planes and filled their abdominal cavity with cargo that can fly around the world. In addition to the all-cargo operations 20 cargo flights a week, but China also conducted five weekly flights on passenger aircraft turnaround.
Canadian officials said that due to the impact of the epidemic, its e-commerce market is growing, and there is a chronic shortage of cargo aircraft. Air Canada plans to convert the Boeing 767, which has recently withdrawn from passenger service, to be able to carry large containers and pallets on the main deck. The premise is that the carrier needs to reach an agreement with the pilot.
DHL Express said that due to the grounding of most passenger aircraft, the abdominal muscle capacity is insufficient, although there are plans to provide air charter services to serve certain major markets. But this year still adds six aircraft, which is to overcome the air cargo capacity restrictions caused during the epidemic.
Finally, remind foreign trade friends who are shipping by air in the near future to communicate with customers on capacity in a timely manner, and to be cautious in quoting (each airline may adjust prices frequently) to avoid unnecessary losses.