Forwarders pursue multimodal options amid overwhelming air demand

The air cargo industry is seeing daily slashes to airfreight capacity and massive jumps in rates due to the extensive number of passenger flights cancelled globally as part of the effort to mitigate the spread of COVID-19. As a result, space on most trade lanes is tight and some even have backlogs. Due to this overwhelming demand, the scramble to book freighter and charter capacity has prompted global freight forwarders, such as Dimerco , DSV-Panalpina , SEKO Logistics and Agility Logistics to offer alternative modes of transport to customers hard-pressed to complete shipments. Dimerco told Air Cargo World it is offering its customers worldwide alternative cargo transport options, such as sea-air, air-sea, cross-border road freight to Southeast Asia and cross-border train freight to Europe, in order to better meet customers’ demand. DSV-Panalpina is offering rail transport for customers with cargo shipments between China and Europe, stating that rail offers a more feasible alternative to sea or airfreight through congested air hubs or ports, in a press release at the end of February. With rail, the journey for cargo from terminal to terminal currently takes between 11 and 15 days from northern and central China to Europe, while transit time from Europe to China is slightly longer at 18 to 20 days. DSV offers customers the options to book full container loads (FCL), less than container loads (LCL) as well as consolidation services for both westbound and eastbound trains. In addition to rail, DSV said road transport from China to Europe is now also possible, via routing through Russia along the Manchurian border, which requires 18 to 20 days. SEKO Greater China’s team recommended in a March 14 press release that customers utilize its Sea-Air service to achieve faster shipping times at lower costs. Meanwhile, Agility Logistics said in a press release today that the trend of ocean-to-air conversions is exacerbating pressure on capacity outbound from China. However, it still recommends customers consider exploring alternative transport models to air, including sea-air or cross-border trucking. With these services and the situation in mind, what competition can air cargo expect? One major U.S. freight forwarder who asked not to be named told Air Cargo World today that in the near term air cargo can expect to see a continued scramble for air capacity and charter requests. Most air shipments will likely be for medical supplies, e-commerce and home goods as shipments for things like garments decline. The forwarder source also said they are seeing certain high tech and automotive products being shipped from Asia into the U.S., suggesting that auto manufacturers may be looking to move production to the U.S., perhaps by this fall. "While it is certainly challenging to book space on freighters right now, trucking is also very difficult as containers are out of position,” the forwarder said. “As for sea, it is possible to see a general rate increase (GRI) in March, but there doesn’t seem to be a lot of competition for air against trans Pacific boat shipments as everyone is still pushing to get things in the air. Once companies begin to see the light of day at the end of the tunnel, ocean may make more sense, but it is difficult to make a projection several months from now.”

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