Dive Brief:
- Shenzhen, China, launched a chartered air freight service to neighboring Hong Kong as the pandemic has constrained cross-border trucking capacity, according to a report from state news agency Xinhua on Sunday.
- A Boeing 767 freighter will fly six times a week through the charter service, which is initially planned to last until early April, per Xinhua. The service began Saturday, with a freighter operated by SF Airlines transporting 45 metric tons of cargo, including exports, to Hong Kong.
- The flights will help meet the transport needs of businesses in Shenzhen and neighboring regions, Xinhua said. COVID-19 prevention measures have limited the ability for trucks to cross between China and Hong Kong, "with long waiting times for control and restrictions for travel determining the capacity," according to Norman Global Logistics.
Dive Insight:
The charter flights should provide some relief for supply chains that have been grappling with recent restrictions and lockdowns. While Hong Kong has eased its pandemic control measures and the Associated Press reported Monday that China reopened factories and businesses in Shenzhen, efforts to curb COVID-19's spread have put pressure on air cargo rates and forced carriers to adapt.
Shanghai-U.S. East Coast rates have already increased 42% this month, according to a March 15 update from Freightos. "Rates from Europe to Asia are also rising, with prices from Frankfurt, for example, increasing 17% to Shanghai and 110% to Hong Kong as it struggles with its own surge," per Freightos.
Air cargo shippers must now also deal with flight diversions. From March 21 to May 1, 106 international flights from 22 different routes scheduled to arrive in Shanghai will be diverted to other airports in major Chinese cities, state media reported last week.
Although freighter flights aren't affected by the diversions, the reduced passenger capacity in and out of Shanghai will still impact rates, according to Norman Global Logistics. Shipping costs have already been climbing due to higher jet fuel prices and airspace restrictions over Russia and Ukraine.
Congestion between mainland China and Hong Kong has added further pressure to air cargo transport. Tightened cross-border trucking requirements have reduced cargo demand, Cathay Pacific said in a traffic update, adding to the challenges the airline has seen amid the recent pandemic control measures.
"Regarding cargo, we are re-deploying freighters to North Asia and the Indian sub-continent to maximise opportunities within the region while our ability to operate long-haul services remains constrained," the Hong Kong-based airline said.
