Suspended US-China fights may shrink airfreight capacity in the upcoming peak season

In the recent weeks, high Covid cases in Chna leading to cancellation of US’s carrier flights, and in response, US government suspended 26 China-bound flights in September.

This movement may shrink the capacity for transpacific flights when the peak season for air freight is coming ahead in September as predicted by experts in forwarding industry.

Airlines that get impacted are: Xiamen, Air China, China Southern Airlines, China Eastern Airlines suspended from 5th September to 28th September, American Airlines, Delta Airlines and United Airlines.

One of Shanghai forwarder assessed that the shrinking capacity could even more when summer season ends: “We’re assuming airfreight in September could be very challenging for the US market, as most of the flights for American and Chinese carriers could be cancelled; we’ll have to see what happens”

He told The Loadstar: “We’re assuming airfreight in September could be very challenging for the US market, as most of the flights for American and Chinese carriers could be cancelled; we’ll have to see what happens."

He added: “Overall, the market has been pretty flat recently for outbound cargo to both the EU and US. This week, rates ex-PVG [Shanghai] to Europe started to increase, but not from other origins, so it’s not certain yet if this is an ad-hoc increase or if it could last longer.”

“Rates are stable for South-east Asia to the US and Europe, but are expected to increase next month, due to more passenger luggage taking up cargo capacity as well as the traditional peak season approaching.”

According to Dimerco’s forecast: Asia airfreight market kept the stable price in the recent months, but it will follow up global market pace in the September.

With China market, Dimerco said that “soft, with declining rates, as export volumes continue to decline, even with flight cancellations into the US and Europe. With heat waves in China subsiding, and new tech products, such as an iPhone, launching in September/October, it may suggest a peak season start at around the third week of September”.

WorldACD – Air Cargo Market Data shared the same forecast for low summer months but rearise to pre-Covid levels: “Demand this year is similar to pre-Covid, but the difference is that we are actually experiencing a normal seasonal summer slack period, as opposed to the relentless demand and capacity shortfalls of the previous two years.”

Also, WorldACD’s data compared “exceptional” cargo volume in North Asia impacted negatively to global growth rate since March, decrease 11% in July, but the total capacity for this region nearly reached 2019 with 1% lower.

Some of the reasons for this decline in North Asia noted by WorldACD: “Other reasons for the relative decline this year in North Asia volumes include Covid-related shutdowns in parts of China, disruptions and sanctions related to Russia’s invasion of Ukraine, a relative easing of ocean freight congestion and some softening of consumer and business confidence.”

Source: https://theloadstar.com/us-china-spat-set-to-squeeze-capacity-as-air-freight-peak-season-takes-off/

Share this article