With factories reopening in China after the government imposed extension of the Lunar New Year Holiday, many are concerned that it is the “calm before the storm” in the airfreight industry. Since demand has been low with factories closed, as well as to contain the spread of the Coronavirus, many carriers have cancelled flights in and out of the region. Many carriers are not resuming normal schedules until the end of March.
Once factories are back to their normal scale of production, we will see a substantial increase in airfreight rates as demand heightens. According to some analysts, the increase could be up to 300-400%. Depending on how quickly the manufacturers rebound, there is also the possibility of some ocean shippers switching to airfreight to try to replenish their stock, which will further add fuel to the carriers to push rates up to make up for the losses in January and February.
Shippers will need to be especially proactive when shipping over the next few months, ensuring they share information with their forwarder, especially in regards to urgent cargo. Communication will be key to assisting businesses to ensure their supply chains have the best chance to recover from this unprecedented situation.
For more information, contact Debbie McGuire, Manager – Freight Solutions.