The COVID-19 pandemic has hit the air freight industry very hard. Since the outbreak of the virus, recent figures have shown that the overall global air cargo capacity has decreased by 35% . Year on year – from June 2019 to June 2020 – global air cargo capacity declined by 27%. The sector has been deeply affected by air transport restrictions and by the fall in passenger flights. An estimated 40% of annual global air cargo is typically transported in the hold of passenger aircraft,  but this year only 20% of air cargo has been carried by passenger flights.
Source: Accenture COVID-19: Impact on air cargo capacity
As a result of these difficulties, air cargo rates doubled, or more – up to five-fold in certain instances – between January and March 2020 .
Response of Airlines to COVID-19’s impact on Air Freight
Amid the current world pandemic, airlines around the world have undertaken various measures in order to continue the shipment of goods via air routes. As stated before, approximately 40% of air cargo is carried on passenger airplanes, however, during the COVID-19 period, many airlines have started to retrofit planes to handle more cargo inside the cabin. For example, Air Canada has engineered a way to remove 422 passenger seats and managed cargo zones so that lightweight boxes are secured with nets .
The International Air Cargo Association (TIACA) , an organization representing all segments of the air freight supply chain, have teamed up with the International Civil Aviation Organization (ICAO) to establish the COVID-19 Technical Group, which comprises of experts from the World Health Organisation and other aviation bodies. Under the group, the organisation aims to facilitate the flow of air cargo around the world during the virus outbreak. TIACA intends the COVID-19 Technical Group to “be the voice of air cargo” and establish concrete solutions to current problems, as well as to provide information to stakeholders timeously as the crisis evolves.
African countries responses to COVID-19’s impact on Air Freight
Since the arrival of COVID-19 on the continent, Africa has experienced a 51% decrease in cargo capacity coming from Europe, while cargo leaving the continent has fallen by 53%. Africa’s leading airlines have responded in a variety of ways.
Ethiopian Airlines has, since the beginning of the pandemic, almost doubled its cargo capacity and deferred two months of plane-lease payments to help navigate the aviation crisis caused by the virus outbreak. The carrier has added new cargo destinations in South America, China and Europe to accommodate air freight demand . Revenue generated from the transportation of goods has allowed Ethiopian Airlines to keep up monthly fixed payments of between $120 million and $150 million, including servicing loans, aircraft leases, salaries and rentals. Furthermore, it has been estimated that in March alone, the carrier transported a total uplift of over 45 848 tonnes of cargo to different parts of the world deploying both its freighters and passenger fleet.
Kenyan Airways has also started to consider wide-bodied passenger carriers to bolster its cargo shipments, converting four of its wide-bodied aircrafts into cargo freight aeroplanes. BBC journalists who visited Kenya Airways, stated that the airline had loaded 40 tonnes of fresh-cut flowers, fruits and vegetables into a Boeing 787 Dreamliner which was destined for London. The cargo was placed on top of seats to accommodate for the little space within the belly .
An example of an innovative initiative is the collaboration between Flamingo Ltd and Kenyan Airways to support the Kenya floricultural sector and the hundreds of thousands of Kenyans it employs. The initiative is called “Flowers of Hope” and it sees Flamingo Ltd – an international vertically integrated horticultural business with large holdings in the South African floricultural sector – collaborating with Kenyan Airways to deliver 300 Bouquets of flowers to the frontline staff in the UK. Despite these innovative initiatives, the price of airfreight in Kenya has increased significantly. The price to ship a consignment from East Africa to the EU has increased to US$3-US$7 per kg from the previous average cost of US$1.50 – US$2.5 per kg pre-COVID-19.
The cargo division of South African Airways, SAA Cargo, for the first time in its history operated a passenger aircraft, Airbus A340-600, for a pure cargo uplift. The Airbus was used as a cargo-only only flight, transporting essential goods between Johannesburg and Frankfurt.
However, despite these measures, African Airlines have witnessed a decrease in their international cargo tonne kilometre of 1,2%, with international capacity falling by 36,6% .
The situation in South Africa
In the early stages of lockdown, it was reported that in Cape Town all air freight agents closed during lockdown, badly impacting exports of baby vegetables and flowers, and only limited volumes of air freight moved through Joburg. The airline, air cargo and associated industries are adapting and innovating to try and meet the demand for air cargo, without the belly capacity of passenger flights. Recently there has been a large increase in cargo flight activity at OR Tambo International Airport. From March to May the airport facilitated a total of 1400 landing and departing cargo-only flights, an increase of 62% over the comparable period in 2019. This increase in cargo flights is largely due to the national airline using passenger planes for the distribution of goods to neighbouring countries and trading partners.
However, with continuing uncertainty surrounding air travel and a potential second wave, traders and distribution and logistics companies are now seeking alternative methods of shipping where costs and risks could be mitigated. For example, cold chain shipping could increasingly take the place of air freight where the products being transported allow for it. Companies like LA Salad in US, which is a supplier of Tescos, and Cuatro Pinos a fresh produce company in Guatemala have partnered and co-invested in the development of a refrigerated ship-based distribution system that has enabled them to achieve economies of scale similar to air freight . This was done prior to the onset of COVID-19, but a recent purchase of 222 new refrigerated reefer shipping containers by Crowley’s (a major logistics and distribution company) Guatemalan branch, was made to keep their customer’s perishables moving through the cold chain, is evidence that there is significant demand for refrigerated shipping and that its increase is largely to do with the significant decrease of air freight supply.
Sooner rather than later several countries may have to decide whether to invest in cold storage shipping or not if they are to keep sectors – such as horticulture – viable on international export markets.
Jarrod Patrick is a Junior Consultant at Imani Development. He recently graduated from the University of Cape Town with a Bachelor’s in Economics and Statistics. Jarrod has a keen interest in trade analysis, international development as well as social and economic issues that affect developing countries.
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