News / With carriers under fire, China's latest holiday adds to the pressure on air cargo

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Flows of PPE out of China are expected to see further delays as the country goes on holiday until Tuesday, while rates continue to soar, triggering criticism of airlines.

It is expected that China’s risk control office, which oversees and checks PPE exports, will close and there could be reduced hours at Customs.

Shippers are already experiencing delays out of China, which are expected, at least temporarily, to worsen.

Meanwhile, the shift reported last week towards using Hong Kong has continued.

“The shift in commercial volumes from South China over to Hong Kong has severely impacted capacity and rate scenarios,” said Flexport’s senior director air freight, EMEA, David Wystrach.

“Rates are at an all-time high; however the shift in volumes has not led to a de-stressed capacity and handling situation in South China or Shanghai, where we still face delays and congestion.”

Despite news from Seabury last week that capacity had risen, albeit modestly, (the total cargo capacity decline of 29% shows an improvement on the previous week, when it was 31% lower), rates have not gone down.

“On the transatlantic side, we continue to see volatile cargo flows and capacity is still unable to cope with the demand, so rates continue to remain high,” said Mr Wystrach.

“The number of airlines sharing news about releasing staff and parking aircraft is also increasing week by week, putting pressure on capacity through the remainder of the year.”

However IATA director general Alexandre de Juniac, appeared to disagree.

“The capacity crunch will, unfortunately, be a temporary problem,” he said, appearing to acknowledge the extremely high rates for air cargo. But these rates have not been welcomed across the board, with carriers accused of profiteering.

“Airlines’ rates are unmercifully increasing daily, amid an unprecedented global emergency situation,” noted Neutral Air Partner in a blog post. “Some airlines and charter operations fail to understand the international need for essential freight and the humanitarian aspect of this demand.

“Undoubtedly, the costs of operations and expenses are very high, but cannot justify $150k per block hour. Under no circumstances does a flight operation from China to the US or EU cost $1.3m to $1.5m for 13 block hours, or $1.8m to South America. Nor is it ethical to charge enormous costs to parties donating goods or trying to protect their medical force and ultimately save lives.”

The blog goes on to point out the ironies in charging, mostly governments, exceedingly high rates: “The tragic irony is that carriers seek financial support from the very same governments that pay them $150k per block hour…Governments all over the world regulate the retail prices of PPE goods to a maximum level, while in aviation they let carriers run rampant…

“The developed world is maybe capable of paying $1m for 100 tons of crucial PPE, but poorer countries cannot afford that.”