AIR CARGO DROP IN APRIL.
5 June 2020
Data provider, Clive Data Services has reported a slight improvement in air freight volumes for the month of May compared to April 2020.
The Data provider advised that there was a “slight upward curve” in airfreight volumes, due to the reported -31% year-on-year decline in May compared with the -37% year-on-year decline in April.
Capacity pressure remained high in in May, Clive Data dynamic load factor indicates the volume and weight of cargo uplifted and April compared to May indicates a slight increase of just over 2.5%. A fall in demand in late May means it is likely that more difficult times ahead as aircraft start to ramp up volumes and capacity into the air cargo industry.
Over the last few months comparing airfreight demand , CLIVE said that March ended far worse than it started, while for April it was the other way around. In recent weeks ,it is obvious that May finished weaker than it started.” CLIVE explained.
Data specialists CLIVE reported: “After a series of week-over-week growth in volumes, a decline set in during the week of May 18-24, followed by an even stronger decline for the last week of May. During these last two weeks, the capacity growth rate versus the previous week was higher than the volume growth, thereby reducing the dynamic load factor for the first time in weeks by 0.5%.”
TAC advises that the reduction of pressure on capacity had caused a negative, downward impact on air freight charges to the busiest trade lanes
The steepest decline in air freight volume in history occurred in April as reported by IATA. It has been reported also that steep declines in air freight charges will continue until capacity ramps up later in 2020 or into 2021.
The managing Director of Clive Data , commented: “Looking at the last 12 weeks, it is clear to see that market volumes remain erratic and that this will continue for the foreseeable future. This is one of the few certainties we have at the moment.”
“We can see some dark clouds gathering and this is a cause of concern for air cargo. This is why, in navigating these uncertain times, weekly data becomes not only relevant to decision-making, but crucial.”
“Knowing what is happening each week gives the industry the clearest direction. We do not see signals yet that the increase in capacity is being met by growth in demand. With the announcements of increases in passenger schedules, global air cargo revenues may suffer ‘collateral damage’ of more capacity returning to the
AIRLINES USING PASSENGER AIRCRAFT TO MOVE FREIGHT
25 APRIL 2020 (1850HRS)
Some European airlines have been loading passenger aircraft with cargo on seats so as to try to keep air craft as full as possible.
Approximately 35 tons of medical goods have been uplifted by a Lufthansa A330 passenger aircraft from Shanghai, China to Frankfurt.
UPDATE WESTERN SYDNEY AIRPORT PLAN
23 APRIL 2020 (0946HRS)
Some of Australia’s largest freight companies have joined in a memorandum of understanding with Western Sydney Airport which is due to open late 2025-early 2026.
Western Sydney Airport will work with Australia’s biggest air freight operators to design a designated freight area for freight handling and operations at the new airport.
Graham Millet (Western Sydney Airport Chief Executive) has stated that Western Sydney International Airport has the potential to become Sydney’s busiest freight hub and will generate thousands of jobs.
“Operations will be 24/7 (unrestricted hours ) which means new export opportunities will become available for producers and exporters all around NSW.
Air Cargo originating in NSW will not need to be trucked to Melbourne and Brisbane, once Western Sydney Airport is operational goods will be uplifted just as quickly to Asian and other world wide markets.
Freight companies signing up to work with Western Sydney Airport on concepts for the air freight hub include Australia Post (including StarTrack), DB Schenker, DHL Express, DSV Air and Sea, FedEx, Menzies Aviation, Swissport, Qantas Freight, Skyroad Logistics and Wymap.
Millett said insights from these international freight leaders would help Western Sydney Airport optimise the design and functionality for its customers.
“The ongoing growth of online shopping as well as demand from Asia for Australian fresh produce, has had an enormous influence on the international freight market,” he said.
“Growing demand for pharmaceuticals, temperature-sensitive and perishable products will also play a key role in the future of air freight.”
Australian airports currently transport more than 1m tonnes of airfreight annually and this is forecast to grow considerably over the next decade.
The first stage of the Airport has the potential to process around 220,000 tonnes of airfreight each year through its proposed on-airport freight facility, with multiple dedicated freighter aircraft stands. This is set to scale up with demand, potentially handling 1.8m tonnes of airfreight each year in the future.
While the freight MOUs signed today focus on the airfreight industry, Western Sydney International will also provide space for Australian exporters, including the Agribusiness precinct located adjacent to the Airport.
Construction of Western Sydney International is “well underway” with the airport “on track” to open in 2026.
Australia’s industry representative for vegetable and potato growers, Michael Coote, believes the sector can continue to grow its produce with confidence. He postulated this following a $110 million International Freight Assistance Mechanism investment by the Federal government.
With Australia’s vegetable exports by both sea and air significantly impacted by COVID-19, AusVeg national manager export development Coote said the announcement had been welcomed by the nation’s vegetable growers.
“Additional planes over the next six months in cities including Perth, Melbourne, Sydney and Brisbane will give our growers another channel to move their produce into different markets
With about 90 per cent of Australia’s airfreight capacity lost since COVID-19 and prices for remaining air freight space dramatically increased, vegetablesWA chief executive officer John Shannon said most of the available air freight capacity had been taken up by more premium food products, including seafood and meat.
While higher prices due to freight costs had reduced demand for some products in international markets, he said demand remained for products that were a staple part of diets.
“There has been an increase of 200-400pc in airfreight costs,” Mr Shannon said. “For example, freight for Singapore and Malaysia is usually about $1.15-$1.50 per kilogram and that has increased to $2.50-$4/kg, while freight to the Middle East is now at $5-7/kg.”
Mr Coote said the mechanism set up by the Federal government was intended to cover the majority of costs exporters would need to pay for air freight.
“We’re hopeful that it will get per kilo down to similar rates that exporters were paying pre-covid, however that is yet to be determined,” he said.