Date: 10.12.2020

Forwarders and shippers face double air whammy

The rollout of COVID vaccines is slowly but surely restricting access to air freight services for other cargoes, at the same time that cargo handlers in the UK unveil massive price increases, that will directly impact the costs paid by air freight shippers.

Just days into vaccine roll-outs and we’re already seeing regular shipments removed from flights, to create space for vaccine distribution.

The distribution of COVID vaccines is going to be complex, with multiple freight networks serving global destinations, according to manufacturing sites and government orders. 

The Pfizer/BioNTech vaccine, which was licensed by the UK last week, is made in Belgium and three sites in the US, while BioNTech is reportedly considering sites in Germany.

Along with Russian vaccine Sputnik V, there are five potential Chinese-made vaccines as well as the much-publicised Moderna and AstraZeneca options.

Chinese vaccines are flying from Beijing to Brazil and Shenzhen to Africa, while huge tonnages of COVID testing kits are heading to the EU from Korea with top priority, mainly to Frankfurt. Over 1,000 tonnes are scheduled for direct freighter services to all EU/UK lanes in December.

The Korean testing kits have competition for capacity, with automotive parts from Hyundai and Kia destined for Vienna and Frankfurt. Originally destined to travel by sea, but with ocean capacity “full until January”, the manufacturers have no choice, but to use air freight.

We are already seeing direct airlines increasing rates depending on space availability and fully expect deferred airlines to follow the same tactic.

Given the challenges that COVID distribution is creating around capacity and cost, it is unfortunate that we see the ground handlers at the UK’s airports announcing air terminal handling charge increases.

The announced handling costs vary between £0.18 to £0.25/kg, with some handlers also imposing COVID charges.

The problem for forwarders and our shipper customers is that we are a captive audience, we have to use the handlers the airlines use, and we just have to pay.

Handlers claims that their costs have gone up as a result of the pandemic, with unexpected operating cost increases due to the challenges of maintaining operations in the COVID environment, including the cost of providing protective equipment for their staff.

Whatever the justification it is rare that we see, once imposed successfully, cost increases reversed.

Metro flex cargo volumes between our Heathrow and Birmingham airport operations, to optimise rate fluctuations and handling costs.

For further information on our air freight services and solutions please contact Elliot Carlile or Grant Liddell.