Responding to Covid-19: Kerry outlines the challenges faced by airfreight supply chains
18 / 05 / 2020
By Damian Brett
Emma Rowlands, strategic sales director, Kerry Logistics UK, outlines how the company responded to the coronavirus outbreak
The Covid-19 pandemic has had a huge impact on the airfreight industry, as capacity has been heavily reduced due to the cancellation of most passenger flights and the crisis has all but decimated the supply chain.
Freight forwarders that have been the quickest to adapt to the challenges have provided robust solutions via chartered passenger aircraft and freighters, alongside sea-air services.
In some cases, this has not only protected the supply chain, but is now seen as an essential value-added service in the turbulent months ahead.
Kerry Logistics’ strategy has been to develop a full range of alternative solutions for our customers to just ‘air’ from Asia to the UK, utilising all modes of transport.
Since the pandemic started, we have seen an increase in China rail enquiries due to escalating rates and extended transit times on airfreight.
Our Road-Air product from China via Almaty, Kazakhstan, has been affected due to the cancellations of flights from/to the UK, leading us to develop a full trucking service to replace the air section until normal services resume. We are now operating a door to door trucking service from any China location into the UK with a transit time of 20 days.
At this challenging time, it is vital for customers to try and build in longer lead times to their supply chain and explore alternative routings for shipments.
We expect that limited capacity will continue for some time as flights to the UK have been severely impacted with up to 95% reduction in available capacity on some routes.
The outlook for airfreight in the short and medium term is turbulent, but there will be an easing of PPE volumes from China in the weeks ahead, meaning the capacity crunch will ease and rates will fall.
In the short to medium term as countries return from ‘lockdown’, the freighter focus will switch to India, Pakistan, and the UAE with much higher demands.
However, this will not coincide with additional freighter services and the overnight return of passenger services that provide belly capacity.
Industry opinion is divided on the return to normality of long-haul belly capacity via passenger flights, but it is likely that the first countries to experience the pandemic will be the first to recover to some extent.
Chinese carriers alongside some Gulf carriers are now providing regular service and others are ready to deploy, but a return to pre-Covid-19 passenger footfall could be 12-18 months away.
There is no doubt that airfreight supply chains will recover, but it will take time and the before now ‘unprecedented conditions’ of operators cancelling flights – if not viable to do so – is no longer ‘unprecedented’.
Carriers that are scheduling flights will probably take a more clear-cut view on the overall profitability of a flight, as cargo has proven to be a vital source of revenue for a number of carriers during this challenging time.
Cancelling a flight due to revenue constraints may become far more commonplace.