(Nov 10, 2020) -?Market demand of global air freight trade is continuously outperforming the capacity supply. This is currently leading to further capacity challenges in the global air freight market as the total number of passenger flights remains very low. Passenger flights in the international long-haul market are far below pre-COVID-19 and not expected to recover in the short-term. This is mainly caused by an on-going impact of COVID-19 (e.g. local quarantine measures, increasing COVID-19 cases among many key large economies, uncertain passenger demand outlook and inventory development / forecasts).
Asia Pacific is currently leading the market related to a strong demand situation also considering pre-festival season product launches during the fourth quarter of 2020. However, it is also very critical to review the situation across countries like Japan and South Korea as they developed to play a major role in the currently supply of healthcare equipment during the pandemic. These markets have been capable to cope with the demand so far due to additional freighter flights and services to support the worldwide supply of critical required medical equipment.
Throughout this peak season we see additional demand in the market for freighter flights and operations which DB Schenker countered with increasing flights in our Global Flight Operations to overcome the current challenging capacity situation. The flight operations program has been extended recently with additional flights from China to Europe and North America as well as regional solutions in Asia Pacific due to the large dependency on passenger flights.
The situation in China at the airport terminals has become slightly worse considering the large spike in volumes and COVID-19 measures. Therefore, the lead time for air freight is expected to increase due to extended handling times at the airport warehouse operations.
Spotlight: COVID-19 Vaccine Logistics
One of the key leading pharmaceutical manufacturers has announced this week a significant progress related to their medical product supporting the fight against COVID-19 pandemic. The air cargo market is further preparing to support the global supply of a possible COVID-19 vaccine. The industry will be required to support a global distribution through approx. 900 flights of 747-freighter aircrafts to reach a global coverage. This additional demand is already foreseen to require airlines shift flights and capacity from certain trade to the markets with the major demand in a first wave of a vaccine.
Our console charter flight schedule now includes the following flight operations:
→?Europe – China – Europe: 4?flights per week (B747-400F)
→?Hongkong – Europe: 2?flights per week (B747-400F)
→?China – USA: 3 flights per week (B747-400F)
→?Europe – USA – Europe: 3 flights per week (MD11F and B747-400F)
→?USA – Australia: 1 flight per week (B777F)
→?Europe – India – Europe: 1 flight per week (B747-400F)
(Nov 10, 2020) - All offices remain in full operation with access to terminal handling and ground transportation. All our European hubs deliver import and receive export freight with no backlogs recorded towards the weekend. Operationally, our linehauls to and from the hubs are running as scheduled. In some areas, our cross-border trucks might experience some minor delays.
(Nov 10, 2020) - Shanghai Pudong Airport Terminals are experiencing some congestion and minor delays clearing backlog, due to a temporary suspension of operations on Nov 9. This situation was because of a preliminary positive COVID-19 test of 1 person, that triggered the Airport BCP and testing 2,800 people working at the terminals.
The situation was contained with no other positive infection results reported, and operations are returning to normal. The incident underscores the continued risk on operations and the vigilance necessary to cope with the ever-present COVID-19 situation.
Similarly, some delays are also seen in KUL as mandatory testing is in effect for all personnel due to some terminal staff testing positive a few days earlier.
Though resurging COVID-19 infections are evident and tight controls remain in some countries across APAC, our air freight operations remain stable and available to support customer needs. Some delays could be expected in customs clearance and transportation. Alternatives to move / transport cargo via other gateways / routes are established. Customers may contact the respective DB Schenker representatives for support or solutions if required.
Capacity is expected to remain volatile. We remain vigilant in monitoring the situation, to mitigate events with potential impact to operations.
(Nov 10, 2020) - Overall, the air freight operations in the countries remain uninterrupted even as Oman, Kenya, and South Africa slip into partial curfew. We continue to serve our customers. Our regional and global preferred carriers are seen to gradually increase the frequency of passenger cargo flights.
No operational restrictions for air cargo business
Qatar, Kenya, Oman, South Africa, Bahrain, Saudi Arabia, UAE, Egypt
Restrictions for operational air cargo business
(Nov 10, 2020) - The 4th quarter and a busy peak-season have placed a strain on capacity to varying degrees by trade-lane. In addition, airport terminals are at times running behind in transitioning cargo creating further challenges. DB Schenker Flight operations and part charters both transatlantic and transpacific are providing secure capacity for our customers, and our airport-based offices are providing the necessary coordination to provide the fastest release of cargo possible. Situation by trade-lane is as follows:
USA – Europe
→ Market demand is moderate to strong. Further charter flights have been launched with the Global Flight Operations Program to provide additional air cargo capacity to Europe. These flights are connecting Atlanta and Chicago with Frankfurt, Germany and other surrounding Central European markets. They offer DB Schenker customers a stable access to capacity in what continues to be a volatile market situation.
USA –?Asia (excluding China)
→ Capacity has tightened on most trade-lanes as a 4th quarter peak has materialized with the strongest capacity challenges remaining with movements to Australia, Singapore and India. DB Schenker’s strong ‘Part Charter’ capacity in place from ORD to destinations in Australia, and flight operations via the DB Schenker Euro Hub from FRA – BOM are supporting DB Schenker customer demands to these destinations.
USA (exports to) – China
→ No capacity constraints to key destinations in China. Demand is moderate with the market supported by the large amount of inbound flight operations and charters that support capacity on the return leg to China.
USA – Latin Am?/ Latin Am to?Europe and APAC
→ Intra-Americas: Market demand has grown significantly into the 4th quarter, with access to capacity becoming very tight with pricing moving up on all lane segments. Demand USA to Brazil and Chile having become much stronger, and critical situations remaining for movement to Peru and Bolivia from the USA, and between Brazil and Mexico. Perishable peak season as well straining available capacity and increasing rates ex Latin America to USA, Europe and Asiatic destinations.
USA – Middle East / Africa
→ South Africa with continued strong demand and shortage of capacity.