Delays of seven days for Shanghai cargo while ‘super peak’ approaches

Shippers and forwarders are facing delays of up to seven days on air cargo shipments from Shanghai Pudong International Airport (PVG) with the situation expected to ease in early September.

Ground handling and ramp operations have been hit by a series of Covid cases over recent days that have resulted in carriers cancelling services and diverting flights to other airports.

In a webinar, Flexport senior air trade lane manager Far East westbound Camille Carenton said that capacity from PVG was down by around 33%.

As a result, cargo being transported to North America faced a backlog of five to seven days and cargo on services to Europe had a backlog of one to three days.

Carenton added that carriers are embargoing transpacific westbound cargo to try and clear congestion at the terminals.

Supply chain risk analyst Everstream Analytics said the outbreak took place at ground handling agent Shanghai International Airport Services (SIAS) and “authorities implemented sanitation protocols for hundreds of employees”.

Some forwarders have reported that operations at handler PACTL were also affected, although it is not clear if this is a knock-on effect of disruption to SIAS operations or because the handler has also faced worker quarantines.

“Health authorities had detected at least five cases among cargo workers at the airport by August 21, prompting airport authorities to suspend ramp operations that led a number of carriers to suspend freighter flights and cargo-only passenger flights until further notice,” said Everstream.

“PVG remains open to passenger flights with a limited workforce; however, the growing backlog of air cargo shipments and increasingly limited air cargo capacity has prompted multiple freight forwarders to stop accepting bookings bound for PVG and warn of delays for export shipments.”

It added: “Disruptions to cargo operations are expected to continue in the coming weeks as it remains unknown when flight schedules will normalise at PVG. Ongoing limited air cargo capacity will likely further increase spot rates that have already climbed by more than 6% month over month.”

The risk analyst said that of the 22 airlines relying on SIAS services at PVG, 17 were operating out of the PACTL terminal and five were operating in the ETL terminal.

Some of those airlines are diverting shipments to Guangzhou International Airport (CAN), Zhengzhou International Airport (CGO), and Shenzhen Bao’an International Airport (SZX).

In an update from Air Cargo News sister title DVZ, Oliver Link reports that Lufthansa Cargo, Qatar Airways Cargo, AirBridgeCargo, Etihad Cargo, American Airlines Cargo have all cancelled flights from the airport over recent days.

Cargolux continues to fly to the airport on a reduced schedule, the report added. Korean Air said it was unaffected.

While many freighter flights have been cancelled from the airport over recent days, FlightRadar 24 shows that freighter flights from Nippon Cargo Airlines, ANA, Kalitta Air, FedEx and SF Express have departed.

Meanwhile, Freightos data show that since the outbreaks, air cargo rates out of Shanghai have increased 15-25% to US destinations and 12-15% to airports in Europe.

Super peak hits

Flexport global head of airfreight Neel Jones Shah said that ramp capacity and Shanghai is down by around 80-90%.

He added that while issues at PVG should pass, they would contribute to what he described as a “super peak”.

“We anticipate congestion to continue through the week of August 30, with the hopes we can get back to ‘normal’ by early September,” he said.

“It’s important to remember that the situation is fluid; we’re working closely with our airline partners for updated timelines. 

“To keep goods moving, Flexport has been trucking significant quantities of client cargo from PVG to Hong Kong (HKG) in order to meet extra sections of our dedicated charter flights, which were successfully shifted to HKG.

“Other regional airports in mainland China, closer to PVG, have also been impacted by a reduction of ground handling operations and have limited capacity to accept new freighter operations. 

“The important thing to remember here is that while this short term congestion will pass, it’s part of a larger cycle of congestion that will compound the ‘super peak’ we’re already in.

“As the holiday shopping season ramps up, companies will have to get creative and be flexible with how and where they move cargo to get goods on shelves and fulfill orders during the most important time of the retail sales cycle.”

The issues at PVG come as cargo operations at other airports and seaports in China have been affected by lockdowns over recent weeks.