To Our Valued Customers:
Global lockdowns, border closings, and weak passenger demand, all due to COVID-19 containment measures, continue to put a strain on the airline industry resulting in massive flight cuts. At the same time, growing demand to ship cargo by airfreight is putting a strain on mostly depleted space capacity. The combination has created unprecedented rate levels and a “here one second, gone the next” space situation.
So here is a shortlist of what we are seeing so far today:
Rates and Space are Moving Targets: General airfreight rates have increased another 10% from last week, however, published rates themselves are not good enough to get cargo moving. The reality in today’s market is that rates, related to space that is actually available, is changing every couple of days – if not overnight. To meet anticipated delivery deadlines, and to minimize the risk of expired quote validity, it is imperative that shippers and importers book immediately.
The “race for space” can be a challenge when taking time zone differences into consideration. Please contact us and we can help you with the best strategy for your unique situation.
Further Reduction in Flights and Operations: Singapore Airlines has reduced their services by 96%, United Cargo by 90%, Virgin Atlantic by 80%, Delta and EK both by 70%, and UA by 50%. Qantas has suspended all international operations and Ethiopian Airlines reduced theirs by 30 countries. Locally, in the USA, carriers such as Lufthansa have reduced operating hours at the airports.
“No-show” Shipments Come with a Penalty: More carriers announced this past week that they will charge customers 100% of the freight costs if they do not cancel bookings 24 hours in advance of departure time. Cancelling bookings within this timeframe is easier said than done - last minute trucking issues, cargo damages, and documentation delays frequently happen within those 24 hrs. When booking shipments with carriers that are now applying this new policy, it is imperative that additional lead time is added for airport delivery.
We suggest delivering cargo to the airline 24 hours prior to the freight cutoff, therefore you can still make the decision to cancel if you cannot meet your own delivery expectations. We are helping our customers manage through this without any major problem.
Apple launch worsens capacity crisis: Apple shipped 200 MT last week from PVG and is expected to double that volume this week. Rates out of PVG are expected to soon exceed $10.00/kg.
U.S. Air Cargo Terminals are Short-staffed: Shortage of staff at airline cargo terminals, related to confirmed cases or fear of the virus, has created backlogs on cargo breakdown and availability turnaround on import shipments. Compounded with the usual delays, experienced in areas that are struggling with weak airport infrastructure, such as JFK and LAX, importers may need to anticipate for an additional 1-2 days before cargo becomes available and delivery can be made.
Flexibility is key: With such a strain on cargo capacity comes the need to consider all alternative options, including utilizing airports much further to the origin/final destination than accustomed to. Being flexible on the methods, carriers, and transit points used to move your shipment could be the difference between meeting delivery requirements or not.
As long as Laufer Group is provided with all details of the shipment – ready date, delivery deadline, origin and final destination (even if we are not handling the first and last mile), we will review all options on your behalf.
Medical Supplies Take Priority but Are at Risk of Being Confiscated: Many U.S. companies are chipping in to fight COVID-19. We are seeing many requests for importing and donating medical supplies such as protective gear – masks, gloves, sanitizer, etc. While these intentions are great, there are still some precautions to be made prior to importing such commodities for the first time. Failure to comply with FDA regulations has resulted in confiscation of goods, fines, and uncollected freight costs.
Airlines are automatically prioritizing these shipments butat a higher airfreight rate than general cargo. Additionally, as a result of the Customs/FDA issues upon arriving the USA,they are also requiring airfreight charges to be paid upon delivery to the origin airport terminal.
If you are considering importing these products for the first time, please contact our CHB compliance team for consultation.