Airfreight stakeholders expect PVG volume surge ahead of June reopening

Airfreight stakeholders expect cargo volumes in Shanghai to surge ahead of the city’s plan to lift current COVID-19 restrictions and reopen in late June. Shanghai Vice Mayor Zong Ming announced Monday that restrictions will be lifted for businesses and community members between June 1 and late July, as all 16 districts have achieved zero community transmissions while daily infections continue to decline, according to an update today from forwarder Crane Worldwide Logistics. However, some forwarders, , including Scan Global Logistics, expect Shanghai and neighboring areas to begin loosening lockdown restrictions as early as this month. [caption id="attachment_66686" align="alignright" width="442"] Photo: Royal Media[/caption] “When [lockdowns are lifted], it is expected that we will see a surge in airfreight volumes owed to customers needed to evacuate idling products in Asia that are needed on the shelves in Europe and the U.S.,” forwarder Scan Global Logistics noted in a May market advisory. See also : Asia-Pacific under lockdown: Supply chain snarls tangle trade lanes Cancellations persist at PVG, SHA With businesses and manufacturers resuming production, volumes at Shanghai Pudong International Airport (PVG) have begun to build up while import operations continue to remain slow, Crane reported. Around 491 arrivals have been canceled at PVG between May 17 and May 20, according to flight tracking software. PVG reported roughly 404 canceled departures through the same period. At Shanghai Hongqiao International Airport (SHA), roughly 395 arrivals have been canceled from May 17 through May 20, alongside 372 canceled departures, according to flight tracking software. Although restrictions have been easing, PVG and SHA have reported significantly more cancellations compared with mid-April . Meanwhile trucking services continue to face challenges amid some easing of restrictions. For instance, lockdowns have been lifted at CGO, allowing trucking connection to PVG, Expeditors reported. However, trucks from Shanghai to CGO remain restricted due to permit requirements. Negative COVID-19 PCR tests are also still required for inbound cargo pick-ups at PVG. Outlook Paired with sanctions related to the Ukraine-Russia war, COVID-19 restrictions in Asia-Pacific have significantly impacted cargo operations and traffic in the region. In fact, the Association of Asia Pacific Airlines (AAPA) in March reported a 1.3% year-over-year decline in traffic , breaking 14 months of consecutive growth. Airports in the region also reported significantly lower volumes. In March, volumes at Hong Kong International Airport (HKG) decreased 11.4% YoY. Although the AAPA had reported that these disruptions are forecast to be “short term,” other cargo stakeholders hold different opinions. Indeed, forwarders like DSV have forecast another challenging year for airfreight due to months of disruption. “We do not believe that we will see a very big change in the disruption even if we get to the later part of this year,” CEO Jens Bjorn Andersen said last month during DSV’s Q1 earnings call . “It’s not unlikely that the whole of 2022 will be characterized by these challenges that we have been facing at the beginning of the year.” In the meantime, prevention and control measures will be divided into three stages, Expeditors reported in today’s update. During Stage 1, which is now to May 21, the city will order an opening of “precautionary areas” to maintain a reduced level of social activity. Stage 2, which is May 22 to May 31, will narrow the scope of both controlled and locked-down areas. All activity is expected to return to normal in the final stage, from June 1 to mid- or late July. The Air Cargo Tech Summit, the new airfreight logistics event presented by Air Cargo World , will take place LIVE in Miami from June 6-7. Learn more and register here.

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