China cargo airports suffer delays due to COVID and capacity shortages
COVID Infections are causing staff shortages at Shanghai Pudong International Airport, disrupting the market and pushing cargo rates up by 112%. But can the rise of global cargo demand be solely due to the pandemic and are airlines doing enough to mitigate these risks?
The international Air cargo industry has been in high demand post COVID as the global e- commerce industry surges and the shipping industry suffers further delays. The high expectation of fast delivery in goods has seen the air freight industry experiencing a 9.2% growth from February 2019 to February of this year.
Yet, the rapid pace of growth has suddenly began to slow down due to reports of COVID cases causing complete closures of airports and terminals. New found cases amongst cargo handlers in China are reported as the reason for the delays - revealing the true fragility of global supply chains at this time. Pickup services, delivery and air cargo operations have all seen major delays with reports of up to 15 airports affected by the Delta variant.
Shanghai Pudong International airport - the largest cargo airport in China - has recently reopened after two weeks of closures and is now facing further delays due to strict quarantine measures. Staff are being asked to work for seven days, quarantine in a hotel for seven days and then quarantine at home for a further seven days on top of being asked to work 2-3 times longer than normal. This has caused a high rate of staff handing in their resignations and leaving the industry.
However, there is a fair argument that air freight disruptions were inevitable due to much needed capacity remaining 9.7% below pre-COVID levels. With the rise in global demand and many passenger freighters -which account for a large proportion of air freight capacity grounded, the demand was always going to outweigh capacity. Supply Chain Specialists Ligentia wrote on their website, “Air cargo operations have been most severely affected, with Beijing, Shanghai Pudong (pre-closure) and Xiamen Airport operating at 43%, 33% and 66% capacity respectively.”
The Air freight industry is dealing with tight space for cargo. Ligentia reported flights were leaving Shanghai Pudong with hardly any cargo in August, which caused a major backlog. With fewer international passenger flights, full cargo flights on prime intercontinental trade lanes were elevating rates even higher. The demand from retailers also in a rush to stock up before the new season also caused further disruptions.
Air freight rates have now risen from China to the US and Europe and although volume is returning to pre pandemic levels, the industry is still producing on reduced capacity as supply and demand remains imbalanced.
About the author
Lisa Hanley is an In - house Journalist working for The BCI. With a Masters degree in Televison Journalism from City, University of London, Lisa has previously worked as a Freelance Producer and Journalist for London Live, PA Media and Thomson Reuters Foundation. Her experience varies from producing documentaries, films and podcasts, to producing news packages for television and voiceovers for radio.