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Airfreight Recovery Slowed by China Lockdowns

Airfreight Recovery Slowed by China Lockdowns

 

 

Recovery of the air cargo market continues to slow due to Covid crisis lockdown policies that restrict China’s manufacturing activity and Russia’s war in Ukraine that has erased capacity.

“As China has indicated that their ‘zero Covid’ strategy will persist until at least 2023, we have to assume problems will continue through to the end of the year,” said Association of Asia Pacific Airlines director general Subhas Menon.

“China’s bottleneck is purely in the hands of the Chinese government. As they ease lockdowns and shutdowns, the constraints at manufacturing bases and ports will ease, and flights can resume in earnest to relieve the shipping congestion.”

International Air Cargo Association (IATA) director general Willie Walsh recently commented that capacity cuts from China’s zero-Covid policy and labour shortages led to a drop in April’s global air cargo demand of 11.2 per cent year over year and a two per cent drop in capacity.

“The combination of the war in Ukraine and Covid lockdowns in China have pushed up energy costs, intensified supply chain disruptions, and fed inflation,” said Mr Walsh.

“The operating environment is challenging for all businesses, including air cargo.”

Air cargo rates on the Shanghai-north Europe trade have fallen to their lowest weekly level since mid-March. Russia’s war in Ukraine is having a negative impact on the Asia-Europe air cargo trade lane.

According to Mr Menon: “The conflict in Ukraine is going on indefinitely, which imposes payload restrictions and additional fuel and operational costs on airlines on the trunk corridors” and according to IATA new export orders were shrinking in all markets except the US.

The association noted that global goods trade has continued to decline in 2022, with China’s economy growing more slowly because of the lockdowns.

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