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Forwarders brace for transatlantic capacity crunch

 

 

By Damian Brett

 

Freight forwarders are bracing for capacity shortages on the transatlantic as airlines axe capacity between Europe and the US.

Over the weekend, the US announced that travellers from the UK and Ireland would join 26 other European nations on its banned list.

As a result, carriers have been ramping up capacity reductions between the US and Europe.

Although cargo aircraft are not included in the ban, it is unlikely that there are enough freighters operating on the transatlantic to cater for demand.

Brandon Fried, executive director of the US Airforwarders Association (AfA), said: “If passenger volumes drop as anticipated, we expect airlines to cancel flights and cargo capacity to the US will diminish as a result. Freight forwarders will most likely seek charter arrangements to satisfy customer demand.

“Forwarders are very creative logistics problem solvers so expect their expertise to result in indirect routings through other countries to get from Europe to the US.”

According to Seabury, 65% of cargo capacity from mainland Europe and the UK is belly space on passenger aircraft. Airfreight is currently 51% of total transatlantic trade value.

Freight forwarder Agility said that the ban will significantly impact capacity and rates in both directions.

It added that space is available, but at premium rates and without transit time guarantees.

Agility warned to expect capacity shortages in both directions as the week progresses.

At least one forwarder has already announced an expanded charter service from Europe to the US.

Last week, Dachser that it would expand its existing Frankfurt-Shanghai freighter operation by adding flights to the US and Latin America.

Dachser explained that the service would begin on March 16 and continue until the end of the month.

Meanwhile, passenger carriers continue to remove capacity from the market.

Air France is to ground its Airbus A380s and its Dutch sibling carrier KLM its full Boeing 747 fleet as part of wider capacity cuts the group expects will result in in potential cuts in its ASK capacity of between 70% and 90%.

IAG is preparing to cut capacity by 75% for April and May. Finnair has followed neighbouring Nordic carrier SAS in making dramatic operational cuts, slashing 90% of its normal capacity from the beginning of April.

Icelandair Group is expecting a summer season capacity cut of at least 25% on the previous forecasts and is working with unions to secure salary reductions.

United Airlines will reduce capacity by half in April and May and has cut executive officers’ salaries 50% in response to a pandemic United’s executives say makes operating an airline “nearly impossible”.

American Airlines has slashed 75% of its international capacity in response to the drop-off in demand as the global coronavirus crisis continues.

Delta Air Lines has told employees that it is grounding 300 aircraft, representing 30% of its total aircraft fleet, and cutting all flights to mainland Europe.

 

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