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From the start of January, Chengdu, Chongqing, Guangzhou and Shanghai airports saw passenger and freighter capacity cuts of 50 percent, 50 percent, 25 percent and 48 percent, respectively.<\/p>\n Kelvin Leung, CEO, DHL\u00a0Global Forwarding Asia Pacific, said DHL was monitoring the situation and working closely with customers to determine the best course of action for any air freight shipments affected.<\/p>\n \u201cWe are seeing intermittent, regional disruptions in China due to Covid-19 and when that happens, we are sourcing alternative capacity from across our broad range of partner carriers,\u201d he said. \u201cWe are also running additional charter flights on the transpacific route. And we are trucking some Hong Kong cargo to alternative airports due to pilot quarantines at Hong Kong International Airport.\u201d<\/p>\n The timing of the outbreak has been particularly poor for exporters. Workers in China traditionally take far longer breaks than the Chinese New Year holiday, which this year falls on the first week of February.<\/p>\n RELATED ARTICLES<\/strong><\/p> To compensate for the prolonged slowdown in OEM output, shippers usually have a bumper month, with a sharp spike in air cargo demand as goods are shipped out of China in the weeks leading up to the holiday.<\/p>\n This year, however, there was no spike, and average prices to Europe and North America actually softened in mid-January, albeit from bullishly high levels, according to TAC Index.<\/p>\n Analysts suggested the dip was an anomaly and rates would recover at the end of January once more cargo reached hubs and more personnel and services came back online. This proved the case later in January, at least on services from Asia to Europe, when rates rallied.<\/p>\n However, the blip was reflected to some extent in the latest findings of the DHL Hong Kong Air Trade Leading Index (DTI), which softened in Q1 2022 to 45.5 points from 49.0 in Q4 2021, even though local air traders reported a much better outlook on Chinese New Year-related orders.<\/p>\n Edmond Lai, Chief Digital Officer of the Hong Kong Productivity Council (HKPC) which conducted the research, said the resurgence of Covid-19 globally, allied with high fuel costs and continued supply chain disruption to transportation networks, had resulted in all indices falling slightly in Q1 2022, \u201cindicating that air traders have become more cautious towards the business environment this year\u201d.<\/p>\n With the Beijing Olympics taking place in early February, it is unlikely China will abandon its Covid-19 strategy any time soon. Indeed, short-term lockdowns with little notice in China could threaten the efficiency of \u201calready stressed\u201d global supply chains throughout the year, according to John Ferguson, practice lead for globalization, trade and finance for think tank Economist Impact.<\/p>\n \u201cChina\u2019s zero-Covid-19 strategy is key as further outbreaks will result in more closures or lockdowns in key areas,\u201d he told CNBC<\/a>.<\/p>\n \u201cGiven that China has the Winter Olympics coming up, as well as important political events later in the year, it is unlikely that China will abandon its Covid-19 strategy in 2022.\u201d<\/p>\n RELATED ARTICLES<\/strong><\/p> As the January DHL Air Freight Market Update has noted, the disruption and loss of bellyhold and freighter capacity in China comes at a critical period for global trade, when the \u201clack of cargo capacity still remains a key obstacle\u201d in the face of rising demand.<\/p>\n Overall schedule capacity was 17 percent lower in December 2021 compared to December 2019, the only meaningful comparison. \u201cAny improvement seen versus 2020 is due to that year\u2019s very low base,\u201d added the Update.<\/p>\n The message for the months ahead: anticipate demand as far ahead as possible, and laser-focus on inventory. \u201cWith more flight cancellations and regulation changes due to the surge in Omicron cases, it is essential for businesses to act fast and in advance to meet the demand, while ensuring that inventory and supply are managed well,\u201d said Thomas Mack, Global Head of Air Freight, DHL Global Forwarding.<\/p>\n \u201cWhile freighter capacity is expected to grow, it will remain restricted amidst strong demand, thus rates will most likely remain high in 2022.\u201d<\/p>\n","post_title":"China casts a pall over air cargo capacity","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"china-impact-air-cargo-capacity","to_ping":"","pinged":"","post_modified":"2025-04-10 13:13:15","post_modified_gmt":"2025-04-10 05:13:15","post_content_filtered":"","post_parent":0,"guid":"https:\/\/lot.dhl.com\/?p=27937","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},"custom":{"thumbnail":false,"title":"","excerpt":"","cta":"Read more","linkmail":false,"cta_url":"","email_address":"","outbound_email_subject":""},"select_existing_outbound_links":false}]},{"acf_fc_layout":"wysiwyg","wysiwyg":" 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rates, are sucking ships out of Asia and driving up the region\u2019s manufacturing and supply chain costs, according to DHL\u2019s February Ocean Freight Market Update<\/a> and the latest insight from leading analysts.<\/p>\n This increase in capacity has left holes both outside and within the region. At the start of 2022, 43.7 percent of the global fleet was operating on the Asia-Europe and trans-Pacific lanes, up from 38.1 percent a year earlier.<\/p>\n But the hardest hit has been trade within Asia itself. Some 331,200 Twenty-foot Equivalent Unit (TEU) slots have been removed from intra-Asian services last year, representing a capacity reduction of 10.8 percent, according to online shipping database Alphaliner<\/a>. That has caused spot rates in some parts of Asia to more than double year-on-year, with no sign of them abating.<\/p>\n Kelvin Leung, CEO, DHL Global Forwarding Asia Pacific, said: \u201cAfter two years of logistics shocks, these increases in intra-Asia rates are not the biggest hurdle supply chain managers have had to cope with. But they are adding to overall supply chain and production costs. We are hoping for some easing of the situation in the second half of this year.\u201d<\/p>\n The shift in capacity to trans-Pacific routes was evident early in the pandemic. As U.S. consumers splurged on lifestyle products during Covid-19 lockdowns, freight rates on the trans-Pacific rose sharply from Q2 2020. Drawn by the demand and profits to be made, carriers began to divert large numbers of ships to the region.<\/p>\n This has left some regions severely short as most additional capacity was sucked into East-West shipping lanes at the expense of regional and Africa trades.<\/p>\n RELATED ARTICLES<\/strong><\/p> The effect of intra-Asia capacity withdrawals has been an increase in freight rates and manufacturing costs in Asia. According to ocean and air freight rate benchmarking platform Xeneta, spot rates from the main Chinese ports to the main Japanese and South Korean ports in 2021 averaged USD 1,400 (\u20ac1,222) per Forty Equipment Unit (FEU), up from USD 640 (\u20ac560) in 2020. In the first half of January they rose above USD 1,800 (\u20ac1,571) per FEU.<\/p>\n \u201cThough the increases are smaller than on some other major head haul trades, the higher spot prices can still have a considerable impact,\u201d said Peter Sand, Chief Analyst , Xeneta. \u201cConsidering that many of the goods on these intra-Asian trades are intermediate goods moving between factories in the region, doubling spot freight rates can often add considerable costs to the manufacturing process, forcing manufacturers to reconsider their manufacturing and supply chains across the region.\u201d<\/p>\n Leung said that while the company was hoping for some easing of the situation in the second half of this year, \u201cDHL continues to secure capacity in sufficient scale to meet customer needs on all trades but booking early is paramount.\u201d<\/p>\n RELATED ARTICLES<\/strong><\/p> The East-West capacity upgrades also came at the expense of liner offerings to and from Africa, where the combined capacity of ships trading between Asia, Europe, America and Africa fell by 6.4 percent to 1.68m TEU at the start of 2022.<\/p>\n Capacity deployed on the trans-Atlantic, and to and from the Middle East\/Indian subcontinent, was relatively stable over the period while Latin America-related services saw an increase in capacity.<\/p>\n However, the intra-European trade proved to be another victim of the capacity shifts. \u201cSome 48,200 TEU slots disappeared from intra-European services (- 4.5 percent),\u201d noted Alphaliner. That capacity appeared to be heading to the Pacific<\/a>.<\/p>\n \u201cThe ongoing capacity reduction was illustrated last month as the 974 TEU SPICA J<\/em> left Europe for China. The SPICA J<\/em> previously operated for many years as a typical feeder vessel in North Europe but left Rotterdam without any cargo mid-December for a voyage to Asia. The ship is currently loading Chinese export cargo in Taicang.\u201d<\/p>\n Although Asia-Europe trade saw a capacity increase of 10.2 percent last year, this was largely due to the delivery of 16,000-24,000 TEU, which replaced the smaller 13,000 TEU units, according to Alphaliner.<\/p>\n The loss of capacity on regional trades such as intra-Asia was primarily a result of vessels being transferred to the trans-Pacific lane, which remains the most profitable for carriers even though port congestion on both sides of the Pacific is at record highs.<\/p>\n Alphaliner estimates that January spot freight rates including premiums on the Shanghai-California lane corresponded to revenue for vessel operators of\u00a0 USD 1.29 (\u20ac1.13) per nautical mile. On Asia-Europe trade, the figure was just USD 0.73 (\u20ac0.64) , up from USD 0.42 (\u20ac0.37) at the start of 2021.<\/p>\n \u201cAt the start of this year, 22 percent of the total container fleet was deployed between Asia and North America, up from 17.5 percent on 1 January 2021,\u201d notes the Update. \u201cCarriers added 1.30m TEU of capacity to this major East-West route over the course of last year.\u201d<\/p>\n RELATED ARTICLES<\/strong><\/p> Unlike in 2020, extra tonnage in 2021 was drawn into the trans-Pacific. The capacity increase, however, was needed to compensate for the huge efficiency loss as many ships faced long waiting times at anchorages, rather than to cope with a corresponding surge in cargo demand.<\/p>\n Dominique von Orelli, Global Head, Ocean Freight, DHL Global Forwarding, said: \u201cCarriers are making logical decisions based on the charter costs they must pay, and the likely returns they can make when deploying those vessels. That equation points to the highly lucrative trans-Pacific trade, despite the port congestion many encounter there.\u201d<\/p>\n This is highlighted by the container traffic situation at Los Angeles (10.70m TEU) and Long Beach (9.38m TEU), which increased by a more modest 13 percent and 15.7 percent, respectively, last year.<\/p>\n \u201cIt is important to note that this is not just about big container lines moving capacity, this is also much smaller operators and feeder companies that are re-diverting ships, and also big shippers which have been chartering their own vessels,\u201d added von Orelli.<\/p>\n![](\"https:\/\/lot.dhl.com\/wp-content\/uploads\/2022\/01\/202201-Airfreight-State-of-the-Industry-key-image.jpg\"\/)
<\/figure><\/a>![](\"https:\/\/lot.dhl.com\/wp-content\/uploads\/2022\/01\/port-congestions-volatile-2022-key-image.jpg\"\/)
<\/figure><\/a>\u56de\u5fa9\u3059\u308b\u529b<\/h2>\n
\u30d5\u30e9\u30a4\u30c8\u306e\u30ad\u30e3\u30f3\u30bb\u30eb\u3068\u30b9\u30ed\u30fc\u306a\u8077\u5834\u5fa9\u5e30<\/h2>\n
\u4e00\u606f\u3064\u3051\u308b\u30b9\u30da\u30fc\u30b9<\/h2>\n
<\/figure><\/a>What does this mean for Asia?<\/h2>\n
![](\"https:\/\/lot.dhl.com\/wp-content\/uploads\/2021\/12\/ocean-freight-Dec-2021-update-key-image.jpg\"\/)
<\/figure><\/a>Capacity gains and losses<\/h2>\n
Ongoing shifts from East to West<\/h2>\n
![](\"https:\/\/lot.dhl.com\/wp-content\/uploads\/2022\/01\/OFR-market-update-Jan-2022-key-image.jpg\"\/)
<\/figure><\/a>Congestion black hole<\/h2>\n