Parcel shippers continue to face transatlantic capacity crunch

US package shippers continue to face disruption on the transatlantic trade lane as the US Postal Service (USPS) battles against the air cargo capacity shortage.

One shipper told Air Cargo News that USPS distribution times between the US and Europe have increased from around two weeks to between five-10 weeks since the outbreak of the coronavirus.

The space shortage comes as passenger airlines that supplied the majority of the trade lane’s cargo capacity have heavily reduced services as a result of the coronavirus outbreak.

Todd Bisson, owner of 80 Proof Media Services, a company that sells products online, said that the “rate of undelivered packages has skyrocketed from an irritating but manageable 2-3% to an existential threatening 20-25%”.

“Further grist for anxiety on the part of merchants and their shipping partners is that it would appear that newer inventory that arrives to USPS is getting out of the country while older inventory just sits somewhere gathering dust,” he added.

He said that USPS claimed to have chartered aircraft over recent weeks to help clear up the backlog, but added “going by the tracking on hundreds of packages my company has stuck in this holding pattern, perhaps 10% of the backlog has been dealt with”.

He said: “The upshot is angry customers who will in some cases shy away from international transactions in the future, and merchants who have lost sizeable amounts of money refunding customers and losing the associated inventory that either never gets delivered or arrives to customers who then decide that a free item is the reward they deserve for putting up with a problem seller.”

In response a USPS spokesperson reiterated that it had chartered aircraft and was also utilising ocean freight to try and clear the backlog.

“The Postal Service is heavily reliant on commercial carriers for international mail transport. We have seen delays internationally due to lack of air transportation when passenger volumes dropped.

“As a result, a significant amount of air transport was lost. We are chartering multiple flight to multiple parts of world, such as Australia, Europe, and Brazil.

“In limited instances we have utilised sea transportation to address shipping delays. The Postal Service is committed to assisting businesses impacted by the pandemic.

“For business customers, temporary modifications continue on how returned mail is handled due to a full box or a business not being open to receive delivery for an extended period.   

 “We maintain steady communications with mailers, and we have regularly advised residential customers and business mailers to let them know about postal facility disruptions that may impact delivery in an affected area via our USPS Service Alerts webpage.”

Yesterday, the fourth ‘air to sea’ USPS diversion set off from the US with volumes from its Chicago, New York JFK, and Miami International Service Centers. The ship is expected to arrive in Rotterdam on June 15.

“The vessel is carrying an estimated 6,300 receptacles in six containers weighing roughly 37,000 kg,” USPS said.

As well as the 15 day transit time, it could take a further seven-12 days for parcels to be delivered.

Capacity between North America and Europe has shown little signs of increasing over the last few weeks and is far behind the year-ago level.

The latest data from Accenture’s Seabury Consulting shows that eastbound transatlantic capacity was last week 52% down on a year ago, compared with 54% in mid-May.

However, passenger airlines are beginning to tentatively restart services and airfreight rates between Chicago and Europe have eased since the start of May, although there was a small uptick last week and they are still 89% higher than a year ago at $1.97 per kg.