30% of global air cargo grounded

More passenger airlines are helping fill the severe shortage in freight capacity by turning their aircraft into cargo-only airplanes to haul critical medical supplies, foodstuffs and other economically essential goods.

The rapid implosion of air travel as countries closed borders to contain the coronavirus outbreak forced airlines to ground most of their fleets, especially widebody planes used in intercontinental service. Lower-deck space in passenger planes represents about half the worldwide capacity for moving goods – and even more between North America and Europe.

Hyper demand of essential and e-commerce goods

Glyn Hughes, global head of cargo at the International Air Transport Association (IATA), estimates that 30% of global air cargo, under normal circumstances, doesn’t have space to move now. Although shipments of many manufactured and high-tech goods have dried up with the stall of the global economy, carriers are experiencing hyper-demand to move medical supplies, protective gear, foodstuffs and e-commerce shipments as people sheltering at home use online delivery services.

With one million flights cancelled through June 30, there aren’t enough all-cargo planes to make up the difference and air freight rates are shooting up as a result.

The ability to command top dollar and generate revenue from assets that otherwise would sit idle is motivating passenger carriers to operate dedicated cargo charters, even though they have less room than a full freighter and finding freight for the return leg can be a challenge when trade is imbalanced.

Charter rates quadrupled

A one-way charter for a full freighter on key routes can cost up to $1 million today, four times the rate before the crisis, according to industry experts.

Airlines are relying heavily, but not exclusively, on large aircraft such as the Airbus A350, and the Boeing 777 and 787 that carry huge amounts of cargo even when loaded with passengers and baggage. Much of the activity at the moment is trans-Atlantic, but airlines are also dispatching cargo-only flights between North America and South America, and Australia, and between Europe and Asia.

Some carriers are being creative by putting cargo in the seats of the passenger compartment, secured by netting and other restraints, to maximize efficiency. And a few are offering multi-party, less-than-full aircraft charters for importers and exporters that don’t have enough volume to rent an entire plane. Freight forwarders, intermediaries that manage international goods movement for clients, also can use the services of a charter broker to pool smaller shipments and secure access to an aircraft.

Ensuring affordable air cargo transport

The capacity shortage is so acute that the Airfreight Forwarders Association is urging airlines to consider scheduled freight-only flight operations – not just ad hoc charters – to ensure an adequate supply of affordable air transport for cargo owners.

“A reliable, planned schedule of flights between origin and destination points that are driven by cargo demand and not by passenger demand would ensure forwarders the ability to access needed lift on behalf of their customers proximal to the cargo’s beginning and endpoints, speeding critically needed raw materials and finished goods to their destination,” the group said in a letter to Congressional leaders requesting the industry be included in any emergency economic relief.

IATA support

IATA is acting as a central clearinghouse of information for passenger carriers trying to make sure they are complying with regulatory and industry standards for carriage of certain products, Hughes said in a telephone briefing with reporters.

Passenger airplanes, for example, may not have fire suppression systems, or temperature controls needed to maintain environmental conditions for pharmaceuticals.

“Each carrier is looking at its fleet, its capabilities, its handling capabilities because many of these airlines don’t actually operate freighters, so they’re not used to carrying large quantities of fully regulated dangerous goods,” Hughes said. “Many of the airlines are choosing not to because their handling systems are not designed to manage that type of cargo in a normal operation” and are sticking to general cargo.

Hughes said it’s important to broadcast to logistics providers and shippers that passenger carriers that previously haven’t operated freighters have added capacity to the system and where it can be found.