US-Europe air cargo recovering from pandemic disruptions

After more than two years of pandemic-fueled supply chain disruptions, air freight along the Trans-Atlantic route is finally making a steady comeback towards pre-COVID levels.

In late 2021, many shippers eagerly turned to air transport as ocean carriers hit snags with port congestion, resulting in unprecedented delays and severe airport congestion.

As one forwarder explained, “Sea freight disruption and schedule failure are creating distressed ocean freight, and conversion to air freight…has accelerated.”

The sudden spike in overwhelming demand caused air freight rates to soar and an ensuing shortage of global air cargo capacity. This, alongside ground congestion,  contributed to a drop in global import and export volumes.

In recent months, Europe to North America air cargo has finally seen rapid, yet consistent increases in capacity volume. This signals a strong recovery in the industry for both airlines and shippers alike.

Case in point: available air cargo capacity this March was 44% higher than in March 2021, and up 82% year over year by late May.

Why air freight is picking back up now

The summer season has increased demand for passenger flights between Europe and the US. Lightening COVID restrictions have encouraged strong returns to international tourism, and more flights mean more cargo capacity for shipped goods.

Freight experts believe the increase in capacity isn’t just a seasonal phenomenon, as numbers show that overall capacity has increased steadily over the past few months.

There’s more good news for shippers: as air capacity bounces back, Trans-Atlantic spot rates are dropping. In the first week of June, prices were down 25% from mid-March, at $3.81 per kilogram.

As the JOC reports, “The injection of belly cargo space as carriers introduce their summer schedules and operate greater numbers of passenger flights on the Trans-Atlantic has dragged down rate levels.”

Overall, this recent jump in capacity and drop in spot rates represent a hopeful scenario in the near future for other trade routes. That being said, shipments from Asia to North America will likely face more challenges before getting better.

Trans-Pacific air trade expects more congestion

Despite the improving Trans-Atlantic situation, trade lanes from Asia to the US are still struggling. The reopening of Chinese lockdowns earlier this month released a wave of backed up cargo shipments by sea and air to the West Coast.

As a result, carriers and forwarders expect supply chain bottlenecks to worsen along the Trans-Pacific route with a sudden spike in cargo volumes.

This will likely lead to further port congestion and capacity shortage on ocean vessels in coming months, as carriers attempt to catch up with delayed US-Asia shipments.

What shippers can anticipate from the improving situation

It’s clear that air freight along the Trans-Atlantic trade lane will be smoother for the time being. Shippers are currently benefiting from more flight route options, greater cargo capacity, and lower spot rates compared to the previous year.

Yet it’s important to remember that the recovery of air transport is fragile and progress can be interrupted as quickly as it came along. External factors like the war in Ukraine, economic inflation, labor shortages, and government mandates will continue to influence consumer buying behaviors, directly affecting global freight supply and demand.

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