The sudden fall in demand for airfreight on the transpacific is beginning to trigger capacity shifts.
Compared with a week ago, capacity in the past 72 hours has fallen 8% globally, according to Rotate, which also said yesterday that 10% of the global freighter fleet – nearly 50 widebodies – had not operated for three days.
This could be explained in part by the May Day holiday, but is likely also related to the ending of the de minimis exemption in the US.
White Rotate indicates that some airlines may have put large freighters into maintenance, other tradelanes appear to be seeing new capacity, notably the transatlantic.
Again compared with the previous week, the past seven days saw an 18% fall in widebody freighter capacity on the transpacific, but Europe-to-North America saw an 11% rise. And there is also more capacity on southern routes: between Latin and North America; and between Europe and Africa.
Qatar Airways Cargo announced this morning that effective Saturday, it will start a twice weekly freighter operation to Atlanta, with over 200 tonnes of weekly capacity on a 777F. The service will operate from Doha to Frankfurt and on to Atlanta, giving it a new transatlantic service. It is also set to launch a Friday 777F flight between Doha, Singapore, Penang and Doha, starting next week.
As yet though, few airlines have announced capacity changes. Challenge Group, however, has announced a new weekly service to Bangalore with a 767F, in addition to its thrice-weekly service to Mumbai.
“Given that India is striving to become the factory of the world, and the production of key verticals has significantly increased during the past few years, our strategic decision to launch a regular and direct India-Middle East-Europe service goes some way towards satisfying the intense customer demand on this route,” said CCO Or Zak.
And Cargolux warned that India would be “like a flame to moths” for airlines looking to place capacity elsewhere.
“Everybody is going to put capacity into that market because of the shifting trade,” said CEO Richard Forson. “India is an aggressively growing market.”
Another new service has appeared in the Indian sub-continent. DB Schenker said it had launched the first freighter service from Bangladesh’s Sylhet Airport, which it described as “just the beginning of unlocking new opportunities to connect global markets with speed, reliability, and stronger support for local exporters”. The weekly textiles flight is thought to operate to Spain.
As yet, speculation that the Chinese ecommerce platforms would put more volume into Europe has not been realised, Rotate’s database showing a 5% fall in freighter capacity from Asia Pacific to Europe last week.
“My big question on Asia-Europe is that if Europe starts being inundated with products manufactured in China specifically, what is the EU is going to do about it?”, asked Mr Forson. “There has been no slowdown [this year] into Europe, but after the critical 2 May [de minimis] date, we can see capacity being put back onto Asia-Europe,” he added.
The one notable announcement which bucks the trend was from DSV, which said it was introducing a charter route between Chicago and Shanghai, starting 13 May.
The Shanghai Star will operate “multiple weekly round-trip flights”, but DSV did not say what it expected the flight to carry. It said it offered “specialised equipment for handling out-of-gauge, oversized, hazardous, and temperature-sensitive goods”.
It added: “The new route is set to strengthen the global supply chains of industries across the United States, connecting key sectors with markets in Asia and other regions of the world.”
With a lot of charter capacity expected to be available, perhaps DSV has a particular contract or customer in mind: transpacific rates are expected to fall.
TAC Index’s global Baltic Air Freight Index fell 4.5% in the week to 5 May, while rates had “fallen into negative territory year on year -5.7%”, it said.
“Overall rates out of China have not yet fallen as much as some feared, with rates to Europe slightly up again over the latest week – though down on lanes to the US,” it added.
