Due to the local lockdown in Vietnam and the closure of Shanghai Pudong International Airport, both volumes and air freight rates continue to surpass the pre-Covid level in August, which indicates the vulnerability of the air cargo market.
Air freight rates continue to climb.
In the event of enormous international demand for air cargo capacity along with a shortfall in supply, air freight rates have been up 15% on the previous year, and even up 112% on pre-Covid levels (Aug. 2019).
Covid impacts the capacity of the air cargo industry.
The chaos in Vietnam and Shanghai has contributed to a 10% drop in volumes from China to Europe and an 18% decrease in volumes for westbound routes. Without the disruption of Vietnam and Shanghai, the air cargo capacity has suffered from the epidemic due to fewer international passenger flights. As a result, even with an 18% increase in the previous year, the global air cargo capacity is still 16% less than the pre-Covid level.
Airlines want and need passengers back.
All airlines care about the margin per flight instead of adding capacity to expand the market shares, while lots of shippers want to see more cargo capacity released from passenger airlines. Passenger airlines are under pressure to generate more revenue, and operating airline cargo will not be a sustainable and profitable option for them.
Source: Air Cargo News