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“Ghost” freighters provide marginal boost to shippers

     Plane being loaded

Ghost freighters, passenger planes flying around the world with no paying customers on board, do not frighten logistics companies.  That’s because the planes are not really empty, they are packed with valuable cargo that producers, retailers and their transportation intermediaries need to move fast.

Airlines shut down most of their passenger networks after the Coronavirus (COVID-19) pandemic destroyed travel demand, and these grounded planes represent more than half of the global capacity for moving goods by air.  Travellers believe the space underneath their feet is exclusively for storing suitcases, but it also gets sold to businesses shipping loose packages and large pallets of goods, depending on the size of the aircraft.  Without enough pure freighters in the market to pick up the slack, logistics companies faced severe capacity shortages and price spikes for moving emergency shipments of COVID-related medical supplies, food, e-commerce orders and intermediate goods needed to keep manufacturing plants going.

Even though global airfreight volumes fell about 30% through April and early May because widespread quarantines extinguished economic activity, the supply of cargo space dropped even more.  Airfreight rates, which vary by trade corridor, jumped three to six times above those typically seen during peak shipping seasons.  Passenger airlines, sensing an opportunity to utilize idle assets at a time of ultra-low fuel prices, began marketing aircraft as auxiliary freighters – or “preighters”, even stuffing cargo into the passenger cabin in some cases.

More than 150 airlines worldwide are operating in excess of 1,300 passenger planes in cargo mode.  Aside from the extra revenue during the Coronavirus dry spell, there are considerable costs associated with parking aircraft, including storage fees as well as maintenance and electrical checks.  While the transformation into full-time cargo operators has been financially beneficial for some airlines, it is not a perfect scenario for all.  Since passenger planes cannot be filled with the cargo to the same degree as a pure freighter, fuel prices and cargo rates are determining factors for airlines in deciding whether to operate.  “Preighters” are also more difficult to load and unload because of their limited space and narrow cabin doors.

How long airlines will continue to operate quasi-freighters remains an open question.  With the pandemic waning in some areas and governments loosening travel restrictions, passenger airlines are beginning to schedule more passenger flights in the second half of June and beyond.  The resulting increase in freight capacity is welcomed by forwarders, but there still may not be enough flights, or frequency, on certain lanes to satisfy demand.

For more information, contact David Lychek, Manager – Ocean & Air Services.

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