Regional pulse: U.S. East Coast freight forwarders navigate coronavirus bottlenecks

Freight forwarders based along the East Coast of the United States report that volumes into and out of the region were on the softer side from late 2019 into January. While the airfreight industry saw volatility in volumes due to global economics and politics last year, the current slackening in volumes can be linked to the expected annual trade slowdown around the Chinese Lunar New Year. This slowdown has also been exacerbated by efforts to stem the novel coronavirus and, in response, forwarders are leveraging alternative routing for cargo shipments to Asia. New Jersey-based Shipco Transport , which serves local, regional and international markets, said there has been almost zero manufacturing in China since the Lunar New Year on Jan. 25. While the holiday usually results in one to two weeks of pause in manufacturing, the continued closure of factories in China has extended that period to more than four weeks due to efforts to control the coronavirus’ spread. With no cargo to export from China, airlines have cancelled many freighters out of the country bound for the Americas. Fewer freighters coming in results in less capacity for U.S. exports, Shipco Transport said. “Each passenger aircraft carries between 15,000 to 20,000 kilograms of cargo,” said Kim Ekstrom, COO of global airfreight at Shipco Transport. “Hundreds of passenger flights are canceled simply because there are no passengers going to and from China, and every time a passenger flight is canceled, cargo capacity is removed from the market, adding to the bottleneck.” New Jersey-based A&F Services , which provides first- and last-mile services for freight forwarders on the East Coast, echoed that sentiment. The company, which is growing its international business, acknowledged that all stakeholders in the supply chain are feeling the impact. “Over the past month, I’ve seen a significant change in cargo month over month due to the political economic market and the health situation now in China,” said Caryl Morgan, vice president of business development at A&F Services. As a result of a backlog in operations to and from China, airfreight rates have skyrocketed, leaving little direct capacity for forwarders. Therefore, freight forwarders are seeking alternatives to transport cargo into China. Shipco Transport has chosen to create an air-sea bridge between the U.S. and China via its scheduled LCL containers between China and its regional neighbors, such as Japan, South Korea, Taiwan, Vietnam, Singapore and Malaysia. “For example, we fly from New York (JFK) into Seoul (ICN),” Ekstrom told Air Cargo World . “The cargo is then moved from the airport by bonded truck to our own warehouse in Busan, where the cargo is reloaded into containers and shipped to China. The entire process lasts eight to 10 days and works both to and from China. Once commerce gets back to normal after the prolonged Chinese New Year, space via South Korea could quickly dry up. So, we are already ready with service through Japan and Taiwan, as well.” Even as the airfreight hopes for a return to normalized operations in the near future the industry can anticipate the impact of the coronavirus will linger for months to come.

Regional pulse: U.S. East Coast freight forwarders navigate coronavirus bottlenecks

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