A Return to Normal? Not Quite Yet

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As the international trade community attempts to reckon with the on-going symptoms and fallout of the COVID-19 pandemic, some carriers and services are coming back online. In the next two weeks, several airlines will begin cargo flights between the U.S. and Europe, including Finnair and TAP Portugal.

However, we are not out of the woods yet. The air cargo rates out of China continue to climb higher, even more so than in previous weeks. Much of the world’s personal protective equipment (PPE) is produced in China and, as their factories come back online, their supply chain infrastructure is struggling to keep up. We are reporting major backlogs at several Chinese cargo airport hubs, the worst of which are at Shanghai Pudong, Guangzhou Baiyun, and Zhengzhou Xinzheng. Air cargo costs out of China appear to be climbing as high as 400% more than normal with prolonged delays of four or more days.

Ocean shippers are also facing difficulty. The demand for non-PPE goods has plunged, forcing more blank sailings. Ocean capacity to the U.S. West Coast decreased 30% due to blank sailings through the end of June. As blank sailings tighten capacity, finding space on ocean vessels will become increasingly more difficult and costly. We recommend placing bookings at least two weeks prior to estimated departure dates in order to secure space.

These challenges come as the U.S. attempts to deal with an overwhelming lack of resources at ports, terminals, warehouses, and carriers. The U.S. unemployment rate climbed to 14.7% in April, its highest rate since 1940. We anticipate domestic cargo will also begin to face delays as carriers struggle to staff drivers.

Trans-Border has activated its vast network of agents and partners allowing us to secure rates and capacity for your merchandise. We are proud to be your partner and are here for you at every step of the way.

If you have questions, please reach out to David Usher in our agent pricing department at agentpricing@tbgfs.com or (800) 493-9444.

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