Air Freight update – September

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Air Freight update – September

We need more planes heading to Australia

In concerning news for the Australian aviation industry last week, Australia recorded the lowest level of flying anywhere in the world. The combined impact of closed domestic and international borders and the reduction in Australians being permitted entry back to Australia, led to this very sad result for the Australian aviation industry.

Travel bubbles will lead to cargo bubbles

Having our cargo hats on, we can see a little light to increased capacity coming to the Australian market. The Australian Government has expressed it’s desire to open travel bubbles with countries that are adopting the same or similar vaccination strategy to that of ourselves. One country spoken of regularly is our friendly neighbours in Singapore. Being a significant global freight hub this would be a huge win for air freight cargo, should this bubble come to fruition. The vaccination rate expressed by both countries is 80% double dosed, with Australia now at 74% single dose and Singapore already past the required 80% we hope this travel bubble dialogue with Singapore increases soon.

Interestingly Singapore has just agreed to a travel bubble with Germany, commencing this month, there will 7 flights per week between the two countries. If Australia can also agree to such a bubble with Singapore then we will immediately see increased capacity and importantly be able to hub European cargo at Frankfurt to travel to Australia via Singapore.

Prior to the pandemic, 70% of inbound air imports to Australia travelled in the belly of passenger aircrafts. As a result when travel bubbles open up, we should see some cargo bubbles.

Rates ex the USA to AU have increased again this month, there is some rate variance between weekend and midweek flights. Chicago and New York cargo continue to move OK however delays are being experienced ex Los Angeles. With less flight options you will need to continue allowing a buffer in your lead times.

Pricing ex European hubs has remained solid this month however delays are being experienced due to the reduced capacity.

A number of challenges are playing out in the China market with the main issue being a temporary ban on passenger freighters. This was implemented at Shanghai airport as a result of a covid break-out which significantly reduced available labour. At present, there can be up to a 7 day delay ex Shanghai.

We expect rates to increase further ex China as peak season has an impact. Golden week holidays commencing early October and no additional capacity being added.

South East Asia
Similar to China rates are still being held however we will monitor and keep you posted.

New Zealand
Space remains very tight to and from NZ. There was hope to kick off the travel bubble with NZ again, but that seems to be further away than many would hope now.

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