{"id":85175,"date":"2021-12-14T14:52:11","date_gmt":"2021-12-14T07:52:11","guid":{"rendered":"https:\/\/advantage.vn\/vi\/?p=85175"},"modified":"2022-08-20T15:15:19","modified_gmt":"2022-08-20T08:15:19","slug":"china-cabin-cargo-ban-will-add-to-pressure-on-air-capacity-and-freight-rates","status":"publish","type":"post","link":"https:\/\/advantage.vn\/en\/china-cabin-cargo-ban-will-add-to-pressure-on-air-capacity-and-freight-rates\/","title":{"rendered":"China cabin cargo ban will add to pressure on air capacity and freight rates"},"content":{"rendered":"

[Advantage Logistics<\/a><\/span>] Cargo in aircraft passenger cabins will no longer be accepted by China in the new year \u2013 a move expected to keep air capacity and freight rates high.<\/strong><\/p>\n

China\u2019s Civil Aviation Administration (CAAC) said: \u201conly anti-epidemic-related items are allowed to be loaded in the cabin\u201d.<\/p>\n

It added: \u201cAt the same time, the new regulations also require that cabin seats cannot be removed to increase cargo space. Aircraft that have removed seats or are undergoing modification projects should be restored to their original configuration.\u201d<\/p>\n

\"air<\/p>\n

The CAAC said the reason was \u201cmainly for safe transport considerations, to avoid hidden transport safety hazards caused by the inability of the cargo in the cabin to be effectively fixed\u201d.<\/p>\n

But the authority acknowledged it would lead to additional pressure on the market. \u201cThis new regulation will further reduce air cargo capacity and aggravate the current air capacity shortage. The superimposed fuel price is still high,\u201d it said.<\/p>\n

\u201cOn the other hand, the tightness of air transport capacity may lead to part of the demand for air transport being transferred to shipping, leading to a further increase in shipping rates and, overall, freight prices are expected to continue to rise.\u201d<\/p>\n

The three major state-owned Chinese carriers are said to have already started the process of returning aircraft to their original configuration.<\/p>\n

However, both the European Union Aviation Safety Agency (EASA) and US Federal Aviation Administration (FAA) have extended their exemptions for cargo in cabins until July next year, indicating that non-Chinese airlines will continue to use them \u2013 but not in China, outside of Covid-related equipment.<\/p>\n

\"China<\/p>\n

Covid-related shipments however are currently creating large volumes. The past fortnight has seen a \u201ctremendous increase\u201d in demand, according to one Shanghai forwarder.<\/p>\n

\u201cIt\u2019s been caused mainly by one commodity \u2013 Covid rapid testing kits \u2013 for which there has been a huge demand in Europe, It\u2019s like what happened last year with PPE. Factory orderbooks are full, so it doesn\u2019t sound like the peak will soften soon.\u201d<\/p>\n

He added that this had led to a variance in rates out of mainland China, where PPE is manufactured, and Hong Kong, which is focusing on general cargo and is seeing lower rates.<\/p>\n

\u201cHong Kong is busy, but not as crazy as the mainland.\u201d On the mainland, he said capacity remained low, with the majority of charters now taking place on passenger freighters, with the CAAC approving perhaps only half of all charter applications.<\/p>\n

\u201cA big shortage of capacity will remain a major issue. The new passenger freighter ban will be very strict and certainly, reduce capacity, and elevate prices.\u201d He also warned of challenges for supply chains once the Beijing Winter Olympics begin in early February.<\/p>\n

\"air<\/p>\n

\u201cThere will be a big impact on Beijing flights. Normally, [when there is an event in China] trucks are limited in their movements \u2013 no dangerous goods can be moved, no charters are approved and flights reduced to a minimum.<\/p>\n

\u201cWe do not think there is any chance of the government relaxing the current strict quarantine requirements until after the games, so there will be little opportunity to get more flights or capacity into the market.\u201d<\/p>\n

The transpacific market remains tight, he said, \u201cthe worst market\u201d. Cargo destined for South America is going via the US, as \u201cthere is very little capacity via Europe\u201d, leaving rates very high \u2013 \u201caround $18 to $20 per kg\u201d, said the forwarder. Pure freighter charter rates are currently \u201csky high\u201d, at some $1.8m to $2m.<\/p>\n

The forwarder said rates had risen 10%-15% this week and \u201cwe are looking at the highest ever rate level now, which is similar already to the record of last year\u201d adding: \u201cIt\u2019s funny that even courier door-to-door prices could now be cheaper than air freight \u2013 but couriers are severely delayed too.\u201d<\/p>\n

Source: The Load Star<\/strong><\/p>\n

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