How COVID-19 impacted airfreight rates

The coronavirus (COVID-19) pandemic has not only had, and continues to have, a terrible and tragic impact on life all around the world – its effects have also impacted and disrupted practically every industry and supply chain worldwide.

At the start of the year as the pandemic grew, each country in turn implemented a protective lockdown to try and slow the transmission of the virus. All non-essential travel was stopped or restricted, including flights. Due to the risk of the virus many of the major airlines also suspended, reduced or cancelled flights altogether from/to high-risk countries.

Initially, due to the 80/20 rule, many airlines continued to operate near empty flights just to prevent losing their landing slots. Under the 80/20 rule all airlines must use at least 80% of their take-off and landing slots at European airports or face losing them to a competitor the following year. In March the European Commission (EC) granted a temporary suspension of the 80/20 rule until June 2020. As such, many airlines have now ‘parked up’ most of their fleets and now only operate limited services. Currently most international flight numbers are at 50% or less compared to the same time last year.

Here’s some news not many people realise: passenger planes don’t just hold passengers. For example: the regular British airways flight from Tokyo International to London Heathrow (HND-LHR) uses a Boeing 777 (77w) plane and takes around 12.5 hours. This model plane holds in the region of 250 people but also has the capacity to carry in the region of 17.5 tonnes of freight. 

Airfreight is normally packed into a unit load device (ULD), which is shaped to ‘belly’, or lower deck of the aircraft. Each shipment inside a ULD will have a house airway bill and each ULD will have a manifest and master airway bill listing it’s full contents. 

As airlines grounded more of their planes due to the reduced passenger numbers this freight capacity was obviously also reduced. This very quickly impacted international supply chains causing delays due to the limited capacity available. Freight and essential supplies are all struggling to book available space on an increasingly limited number of flights.

With this in mind, any company still shipping via airfreight at the moment will have noticed the huge increase in airfreight rates. This is due to the reduced capacity, increased airline operational costs, and airlines trying to recoup some of their losses – increased rates to shipping agents means increased rates to shippers.

So what options do you have?

Is the shipment urgent? 

• If the goods are not required urgently consider holding the shipment until a later date. 
• Check with your customers – with many companies still closed or working at a reduced capacity, goods may not be as urgently required as before. 
• If possible, consider the option of using slower, more cost effective services such as sea, rail or road freight. 

Freight Flights

Most freight flight services are still operating but again, due to the increased demand, you may struggle to book a shipment and costs will have increased.

End in sight?

As it is anticipated the reduced flight numbers could extend into next year, don’t expect business to return to normal any time soon. Use this time to audit your logistics to become leaner and more efficient – look into options such as consolidation services and other shipping services. Above all – stay safe and well and continue to follow your government’s advice.