COVID-19 Air Freight Update [Updated: 28th June, 2020]

Limited Scheduled Passenger Operations Resume on Some Tradelanes

Origin: Americas

Restrictions

Canada: The Canadian borders are closing to all but the country’s citizens. International flights will operate to just four airports in Canada.

**Latin America: **

• Brazil has closed its borders to nine South American countries.

• Peru also closed its borders on March 16 and has declared a state of emergency.

• Chile ceased allowing entry to foreigners on March 18

• Colombia and Argentina have both banned international flights until September 2020.

USA: Travel restrictions from Europe, including the United Kingdom and Ireland, to the United States, are still in effect. Non-essential travel to and from Mexico is also prohibited by the US government—a measure which came into effect on March 21. As of May 28, the United States implemented a ban on travel to and from Brazil.

Cargo Impact – North Americas

• North Americas - Europe: Due to stability in freighter operations, space is available on this tradelane, although subject to constraints and frequency reductions. The use of passenger aircraft as freighters is compensating marginally for the continued significant reduction in passenger airline capacity. Some passenger flights have recently resumed on these routes.

• North America – Asia: Capacity still under constraint from transit hubs in Asia to secondary destinations, arising from continued reductions in passenger flights on intra-Asia routes. However capacity to the main hubs has improved considerably as freighter schedules have stabilized. Passenger operations remain limited.

• North America - India and Middle East: Significant capacity reductions are in evidence on passenger flights, although a few services have resumed. Belly capacity constraints are also compensated for on a marginal level by the use of passenger aircraft for freight-only operations. Overall capacity on this tradelane is still constrained.

Cargo Impact – Latin America

• Latin America – Asia: Capacity reduced substantially. Capacity constraints are also affecting transit hubs, impacting air freight from Latin America routed to Asia via the USA.

• Latin America – USA: Overall capacity has stabilized, but is reduced in comparison with last year. Belly capacity shortages are substantial. However, an increase in freighters, and the operation of “ghost flights” by passenger airlines protecting their slots, is adding to overall capacity.

• Intra-Latin America: Capacity is constrained considerably as a result of passenger flight reductions. Widespread travel restrictions mean cargo capacity is limited to freighters only, mostly routed through Miami.

• Two South American airlines have filed for Bankruptcy protection: The moves, taken by Colombia’s Avianca and Chile’s LATAM, should not affect their near-term flight-operating schedules.

Origin: Asia/Australasia

Restrictions

• Australasia: New Zealand and Australia have closed their borders to all visitors, with effect from March 20.
• China: New flight restrictions in China limit foreign carriers to one inbound flight per week. Chinese carriers may fly just one route per week to and from each of the countries they serve.
• East Asia: As from March 19, all visitors to Hong Kong must self-isolate for 14 days following their arrival. The country is considering stepping restrictions up to impose mandatory quarantine for all visitors. All persons arriving in Taiwan must also self-isolate for 14 days, and the Taiwanese government has banned entry for most foreigners.
• India: India has extended its lockdown until the end of June, meaning all international commercial passenger flights into India remain banned. Carriers have been running passenger to charter and ghost flights for the movement of air freight only. Business continues to be affected by capacity constraints into the FE, US, and EU regions, and consequential high prices.
• Pakistan: All provinces entered government-imposed lockdown on March 24, with suspension of all international passenger flights.
• Southeast Asia: New restrictions in Cambodia, Malaysia, Singapore, Thailand, and Vietnam have increased the squeeze on intra-Asian air-freight routes, which were already suffering from substantial capacity constraints:

Thailand: Air, sea, and land borders have all been closed since March 25.

Vietnam: On March 21, Vietnam announced that all inbound international flights would be halted.

Malaysia: The closure of air borders and the lockdown currently enforced in Malaysia has been extended until April 14.

Singapore: March 22 saw Singapore announce that all transits through the city-state, and all short-term visits would be prohibited.

Cargo Impact

• Capacity reduced on all Asia trade lanes: According to Seabury, All routes to and from locations in the Asia-Pacific region are subject to reductions in wide-body capacity.
• All primary cargo airports seeing capacity reductions: Beijing, Shanghai, and Hong Kong airports show the largest air-freight capacity reductions, but capacity is down at all key airports in Asia.
• Signs of recovery on inbound and outbound capacity for China: More freighters are operating flights into and out of China, but ocean to air conversion trends are increasing pressure on outbound air-freight capacity.

Passenger-flight cancellations, along with an increase in production in China, is adding to the scarcity of outbound capacity and is impacting mainland China’s export markets.

Customers should consider alternatives to air freight, such as cross-border trucking, where practicable, or multi-leg combinations of ocean and air freight.

Reduced passenger flights from the Middle East, the Americas, and Europe have added to pressure on inbound capacity to China.

• Intra-Asian air-freight rates see record surges: Due to the huge number of passenger airliner and freighter flight cancellations, capacity has shrunk to unprecedented levels. As a result, intra-Asia air-freight rates have surged upward, continue to increase quickly, and are volatile. This is having a knock-on effect on capacity for long-haul air freight to the United States and Europe.
• Hong Kong rates increasing: Exports from Hong Kong to the USA and Europe are gradually increasing, while inbound routes from South China are heavily congested. Rates to Europe and the US have increased sharply as a result of new entry restrictions. Charter rates too, have surged.

Origin: Europe

Restrictions

• The European Union has closed its external borders, encompassing 26 countries and a population of more than 400 million, to most third-country visitors. The closure commenced on March 17 and will be in effect for 30 days at least.
• Turkey has stopped passenger flights to 14 countries, with the exception of routes to New York, Washington, Addis Ababa, Hong Kong, and Moscow.
• All Russia’s borders were closed on March 30.

Cargo Impact

• Cargo-only passenger flights small compensation for overall belly-capacity losses: While several carriers (20+) are operating cargo-only services with passenger airliners, the total belly capacity is still 75% down on January totals
• Europe – USA: Spot price rates have increased considerably and capacity reductions continue to increase. Some space is available, but with constraints.
• Europe – China: Capacity is substantially reduced and rates are surging.
• Europe – Southeast Asia: Substantial capacity constraints exist, arising from passenger-flight reductions. Air-freight rates continue to soar.
• Europe – Middle East: Rates are high as a result of major capacity reductions.

Origin: Africa and Middle East

Restrictions

• The Levant and Arabian Gulf:

Scheduled passenger services are expected to resume shortly in several countries in the GCC and the Levant, but with minimum capacity.

Turkey, Qatar, and the UAE have already allowed some flights to resume.

In Lebanon and Oman, scheduled international passenger services are expected to restart on July 1.

Saudi Arabia has allowed domestic flights to resume, but has yet to announce any information regarding commencement of international passenger services.

• Oman:

All international airports in Oman have been closed to passenger flights from March 29.

Freighter flights are operating as normal.

• Iraq:

Basra: All airport operations suspended until March 25.

Baghdad: All airport operations suspended until March 25.

Najaf: Airport closed.

Truck movements: Partially halted at specific crossings on the Iraq/Turkey border.

• North Africa:

Egypt: Passenger services will resume on July 1.

Morocco: Borders with neighboring countries have been reopened. Some scheduled passenger flights to Canada, France, and Switzerland are now in operation.

• Southern Africa:

South Africa has allowed domestic flights to recommence, but has yet to announce when airports will reopen to international passenger services.

Mozambique and Angola still have restrictions in place on passenger flights. Essentials such as medical supplies, food, and cleaning/hygiene products are being given priority as air freight.

• **East Africa: **

Kenya: Kenya: Passenger flights will be allowed to resume from July 15.

Uganda: Borders closed since March 23, although cargo services are allowed to continue.

Rwanda: Borders closed to all, with the exception of cargo traffic.

• West Africa:

Ghana and Nigeria both closed their borders with effect from March 23.

Cargo Impact

• Freight is moving in and out of Africa and the Middle East on scheduled cargo-only flights, as well as via charter and unscheduled freighter services.
• The region’s major airlines are flying freight in the holds of passenger aircraft, converting them to temporary freighters in the absence of any passengers.
• All contractual air-freight rates and tariffs are suspended in the region, and committed capacity cannot be guaranteed.
• Charter rates have doubled
• All air-freight rates have reached the highest levels ever.

IATA News

IATA releases guidance for transporting cargo safely in airliner cabins:

• We have reported regularly on the use of wide-bodied passenger airliners for cargo-only flights using belly space. Some carriers are now expressing a wish to carry additional cargo inside the passenger cabins of their airliners. In response, the International Air Transport Association (IATA) has issued a detailed safety risk assessment and recommendations for the practice. You can see a letter from IATA’s CargoIS team here, which introduces the association’s guidelines for safe transportation of cargo in passenger-aircraft cabins.

• Status updates for most of the world’s air cargo carriers are now available on a new web page published by IATA. The Airlines Cargo Operations Status page includes the facility to search by carrier, and classifies operations as follows, depending on the known status:

Normal

Pending airline information

Service suspended

Some service impacts

Unknown

• The page also includes the date and time of the latest update, and links to the carriers’ information pages.

On April 24, IATA issued its second COVID-19 Air Cargo Impact report. The report focuses on dynamics in the mainland China market, while also providing analyses of other key freight markets, such as the United States, Germany, and Hong Kong.