Demand for PPE, face masks and medical equipment will drive air freight demand from China persist into the 3rd quarter and is contributing to airport congestion, exacerbated by limited capacity and strict new export controls.
The flow of PPE and medical equipment, particularly from China, is likely to continue for 2-3 months, particularly as it seems that hospitals and care workers are just starting to receive their supplies and inventory for a potential second wave of infections will be required, meaning that demand is almost entirely undiminished.
Norman Global Logistics has been importing and distributing millions of PPE units from China and the United States, using a mix of freighters, charters and latterly PAX belly-hold capacity, as a result of the growing number of passenger aircraft that have been converted to all-cargo mode cargo.
Air freight rates, which spiked massively as governments vied for urgent PPE stocks, encouraging some shippers to use our sea/air and rail services, may finally be plateauing, as the new PAX capacity comes on stream.
Even with the added PAX belly-hold , PPE demand and limited capacity will keep air cargo rates high for some time, but we are hopeful that they will level off in the days and weeks ahead.
As new PPE and medical equipment supply chains become established and air freight capacity continues to expand, it is possible that congestion at some origin and destination airports may occur, particularly those in regions with complete or partial lockdowns.
Guangzhou, Zhengzhou, Shenzhen and Xiamen have been very busy, and will remain hot spots for some time yet,
“Before the holiday it was as bad as it could get. There were huge truck queues and congestion at warehouses in Pudong. There were long waiting times and a lot of cargo couldn’t catch flights. That crazy situation has improved somewhat, but it is still very congested.”
Stefan Holmqvist, MD of Norman Global Logistics Asia
We have seen significant delays at Shanghai, with some aircraft flying out empty over the Labour Day holiday, caused by the strict new PPE customs inspections that we highlighted last month.
Even though customs inspection waiting time is now five or six hours, rather than the 48 hours experienced during the peak of the congestion, we are delivering cargo five days in advance of flights, to allow plenty of time for any inspections and to ensure safe departure.
The tighter export controls are making it very difficult to transfer cargo to Hong Kong, so most PPE must go through mainland airports.
We are working with our colleagues in China, to monitor the situation closely and will continue to use a mix of air, sea/air and rail services to offer the most cost-effective transport solutions and avoid congestion.