- Air cargo prices have surged in the pandemic as capacity plunged.
- International travel has dropped sharply, taking belly-cargo space out of the market.
- Some passenger carriers have started flying cargo-only flights in an effort to boost sales.
The coronavirus pandemic has created a global crunch in air cargo markets and retailers like Alex Motamedi in Harbor City, California are feeling the pain.
“We’ve been so desperate that we take anything and first available,” said Motamedi, general manager of La Espanola Meats, which sells imported Spanish ham, cheese, sweets and other products.
Certain products are arriving a month later than usual and air freight costs have doubled in some cases, Motamedi said. Such perishable items often arrive by air so they don’t spoil.
The root of the problem is the slump in air travel during the pandemic, which has forced carriers to drastically reduce flights to help curb their losses, taking air cargo capacity out of the market and driving up prices.
About half of the world’s air freight demand is usually met by space in passenger planes’ bellies. That means a flight home from a vacation in Greece or Iceland might be shared with goods like feta cheese or cod.
New Covid-19 cases, lockdowns and a web of travel restrictions have had an outsize impact on international travel, while domestic demand has recovered some ground. Demand for international air travel was down close to 90% in September from a year ago, according to the International Air Transport Association, a trade group whose members operate most of the world’s airline capacity.
Seeing a bright spot in otherwise bleak landscape, United, Delta and American this year started flying cargo-only flights. All three already had cargo businesses but their customers’ goods usually fly on passenger flights.
What began as cargo-dedicated flights to transport personal protective equipment and other medical-related items at the start of the pandemic has expanded. Airlines have been redeploying their aircraft to help deliver produce, apparel, electronics, fish, like Scottish salmon, and pharmaceuticals, executives say. American Airlines’ vice president of commercial cargo, Roger Samways, said the airline saw an increase in Botox shipments to the U.S. this spring.
“We hadn’t seen quantities of this nature” before, he said.
Capacity remains limited, making air cargo more expensive.
Cargo rates from Europe to the U.S. this month were about $4 a kilogram, up 150% from a year ago, according to the TAC Index. From mainland China and Hong Kong to the U.S., prices on Nov. 2 were about $5 a kilogram, up 64% from a year earlier.
The fourth quarter is the peak period for air cargo as it coincides with the holiday season, a surge that could drive prices even higher, particularly without the