Airlines like Virgin Atlantic, BA, United and dozens of others have had so much cargo demand over the last three weeks that they’ve been flying passenger aircraft on cargo only flights.
That sudden boom in shifting global freight is now deflating faster than balloon with a hole in it. As the western world stops shopping, as just one example, Bangladesh, which makes vast amounts of clothing for US and European markets, has lost $2.67 billion in unshipped orders in just two weeks.
In Kenya, full or partial lockdowns have prevented fruit and vegetables to European supermarkets being picked and shipped, the same has happened in Colombia, Peru, South Africa, and even the Vietnamese and Thai prawn and fish markets, all of which supply by air to European supermarkets. The global flower market is unharvested and unshipped.
All of this is hitting the air cargo market hard. The need to ship those goods sat waiting to move has already passed and new product isn’t being manufactured or harvested to fly.
A slight upturn in the China-Europe and Hong-Kong-Europe market is showing small shoots of recovery, but overall, its going to be a harsh 6 weeks coming up for most air cargo operators.
Even the big express airlines like Fedex and UPS are showing dramatic falls in demand – e-commerce is largely stalling at an international level.
China has told its airlines they may make only one international flight to each country the serve, once a week, although cargo isn’t restricted.
Overall demand is said to be 15% of what it was three weeks ago.
However the mid-term forecast is that when things do re-open and the demand picks up, air freight is going to rocket in price. The question is whose freighters will still be around to ship it.
As one said “Cash flow? What cash flow?”.