Neo Air charters 60 e-commerce flights amid Red Sea crisis

As e-commerce continues to drive airfreight demand out of Asia, German cargo charter Neo Air Group has operated 60 widebody e-commerce flights from Hong Kong International Airport to Europe, the United States and Latin America in the past two months to avoid Red Sea disruptions . Freight shifting to air from sea increased 17.2% between December and March due to conflicts in the Red Sea, according to logistics market research company TI Insights . [caption id="attachment_57141942" align="alignright" width="450"] (Courtesy/Neo Air Group)[/caption] Another 9% of freight moved to a combination of sea-air transport during that time, TI Insights data shows. Houthi rebels have been firing on ships in the Red Sea since mid-November. Propping up e-commerce As the threats continue, Neo Air saw an opportunity to bolster its e-commerce shipments, General Manager Brian Davis told Air Cargo Next . “ Normally these charters are in demand only around the peak-season period [or the fourth quarter] yearly,” Davis said. “But the demand has been sustained and it looks like it will continue well into the summer. Scheduled airlines have not been able to cope with the demand, therefore the extra charters.” Another 11 charters are scheduled this month on Neo’s Boeing 747F and Boeing 777F aircraft, he added. “More and more these days, especially in China and Hong Kong, we start to see the first — or actually the beginning — of some ocean shipments being converted into air,” Milena Milenkovic , regional airfreight manager Benelux at Flexport , said during the company’s market update webinar March 5 . “So, this might put some challenges on the supply side.” All 60 flights chartered with Neo were contracted with top forwarders, which Davis declined to name due to contract agreements. “The aircraft are always fully utilized [with] around 100 tonnes of cargo per flight,” Davis said. “So over the 60 flights, around 6,000 tonnes [of cargo were moved].” Predictability about the situation in the Red Sea remains the largest concern, Davis said. “I believe over 40 commercial ships have been attached in that area,” he said. “Unpredictability and potential delays are fatal for the business models in the e-commerce sector.” Growing demand Neo is not the only airline taking on shipments due to the Red Sea situation. “However, Neo is the sole cargo charter broker on the market that has the strict policy of only working with freight forwarders and logistics suppliers,” Davis said. “This loyalty to our clients [and] the forwarders, places us in a very good position.” E-commerce is projected to grow 7% to 9% on China-U.S. trade lanes this year, Derek Lossing , senior adviser and founder at Cirrus Global Advisors, previously told Air Cargo Next . This boom is affecting airfreight rates and demand heading into the end of the first quarter of 2024. Flexport reported on March 5 that airfreight rates to Europe fluctuated in February. Rates from: China were down 20% year over year; The United States were down 6.6% YoY; and India and Bangladesh were up 63.5% YoY. “Retail customers are actually moving their production from China into India and Bangladesh more during the Lunar New Year holidays, because, of course, the production cannot stop,” Milenkovic said. “So, this is giving more and more demand into the market.” For Neo Air, this demand is also benefiting its humanitarian efforts , Davis said. “2024 has started with a bang for us on many sectors,” he said. “Particularly the humanitarian aid and relief sector where we have chartered 40 aircraft [this year] already mostly to the Middle East, but also Africa and Central Asia.” Register here for Air Cargo Next ’s free webinar, “The Role of Drones in the Future of Air Cargo,” on Tuesday, March 26, at 11 a.m. ET.

Neo Air charters 60 e-commerce flights amid Red Sea crisis

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