The forwarding sector said the airspace restrictions imposed by Russia, European states, Canada, the UK and in North America were forcing airlines to cancel and adjust services.

“Adjustments to flight schedules are unavoidable and increased transit times must be expected. As a result, we also expect a financial impact on airfreight rates,” warned Copenhagen-headquartered forwarder DSV. “We are not able to provide an exact estimate of the impact at this stage.”

It added: “Due to ongoing developments in the Russia-Ukraine conflict, several air carriers have stopped using Russian airspace. This will have a direct effect on air freight services in the coming period.

“DSV is in close dialogue with our carriers to find alternative routings to ensure we provide the best possible service for our customers.”

Kuehne+Nagel warned: “Due to the closure of the air corridors over Russia and Ukraine and the mentioned sanctions, we foresee capacity restrictions and, as a consequence, longer lead times.”

Scan Global Logistics (SGL) said that fuel prices will contribute to higher rates.

The forwarder pointed out that one of the most affected airlines will be Russian carrier AirBridgeCargo, which is blocked from European and North American airspace, two of its biggest markets.

“Overall we expect the current situation will trigger an immediate capacity constraint across transport modes, as well as pressure on freight rate levels, including oil price increases.”

SGL said that many airlines have already initiated to suspend a number of flights and design alternative routes, leading to extended flight time and increased fuel cost.

“Russian freighter carriers Airbridge and Volga are significantly impacted. They have cancelled the majority of flights to/from Asia, with this having a significant overall capacity impact. Asian airlines are not banned from Russian airspace, however, note, we also see Asian-based carriers cancelling flights.”

Singapore Airlines, Swiss, Japan Airlines, FedEx, and UPS have suspended direct flights to/from Russia, SGL said.

Flexport said its research showed that average flight times on six key trade routes from Asia to Northern Europe have increased by 3.4% (range 0.6% to 6.9%) in the five days to February 28 compared to the December 1 through February 22 period.

“The most significant impact is the need for rerouting around the conflict zone, extending transit times, and increased carbon emissions,” Flexport said.

“Some flights between Asia and Northern Europe will need to be rerouted via new southerly routings over Saudi Arabia, amid restrictions linked to Iran, Syria, and Yemen.”

The company added: “It is worth noting that many flights from China and the northern part of Southeast Asia as well as South Korea and Japan typically travel north of the affected region.”

The forwarder pointed out that Antonov’s fleet of freighters – mainly used for heavylift operations – are also affected.

It said that all but five of its freighters were in Ukraine in the days before the start of the conflict.

The remaining five, all AN-124 class with 150 tons capacity each, landed in Europe or the US in the days before.

The forwarder added that several lease firms have reportedly confirmed they will end their contracts with Russian airlines.

The 43 jets of the Volga-Dnepr Group, which includes AirBridgeCargo, features 27 Boeing and 11 Antonov jets. For Aeroflot, 82% of its fleet are Airbus or Boeing planes.

Sanctions could also hit the provision of aircraft parts making maintenance operations difficult.

Despite this, AirBridgeCargo has continued flying since the start of March with more than 15 flights completed, according to FlightRadar24. Destinations include Shanghai, Beijing, Hong Kong, Dubai, Shenzhen, Seoul and Bahrain.

However, Flexport said the loss of Russian cargo capacity will have less of an impact on the overall market than the extended transit times.

“The impact on global airfreight may be minimal given both airlines each represented less than 0.5% of global airfreight carried in 2019,” Flexport said.

Source: www.aircargo.com

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James Gagne, president and chief executive of Seko Logistics, outlined a challenging market for freight forwarders in 2022.

He highlighted ongoing issues in ocean shipping, labour shortages due to Covid hitting port/airport operations, ongoing consumer spending for at least the first six to nine months despite inflation, elevated freight rates, rising e-commerce demand, semi conducter demand/shortages and driver shortages as just some of the challenges facing supply chains this year.

For airfreight, belly capacity also appears unlikely to recover to pre-Covid levels this year.

As a result, 2022 will be “the year for air charters”, he said.

“The focus is on doing more on the charter part and we see the need for charter capacity only growing to service our clients,” he said.

Last year the company used 397 charter flights compared with around 72 flights in 2020. This year Seko expects this figure to grow further by around 20-30%.

Other forwarders have also been busy expanding their charter operations in the opening months of the year.

Geodis will expand its AirDirect cargo network in Asia Pacific as it looks to meet “surging demand” in the region.

AirAsia X (AAX) has formed a new air logistics partnership with Geodis to provide the additional cargo capacity.

As part of the partnership, the airline will provide Geodis with “dedicated scheduled cargo flights” on a new weekly rotation from Kuala Lumpur (KUL) to Shanghai (PVG) and Sydney (SYD) and will also add a second weekly rotation to its existing KUL – Hong Kong (HKG) – Chennai (MAA) – KUL service.

This agreement is set to run for an initial period of six months commencing from January 20 with further extensions to be considered.

All the flight schedules are serviced by aircraft chartered on a long-term basis and will add an extra 320 tonnes of capacity to its charter network each week, Geodis said.

Meanwhile, in mid-January, DB Schenker added charter capacity out of India as it looks to meet capacity constraints.

The forwarder offers charter capacity on a weekly flight operating on the route: Bengaluru-Doha-Munich-Chicago. The new route is being operated by Qatar Airways Cargo utilising one of its B777 freighters.

The flight is in addition to its existing charter operation covering Mumbai, Frankfurt and Atlanta.

Both flights connect three continents as part of the forwarder’s Global Flight Operations Network.

The company told Air Cargo News that the new route would cover a wide range of verticals such as automotive, consumer and retail, electronics, industrial and chemicals, healthcare and aerospace.

Also, DSV has responded to Covid restrictions and lockdowns in Asia by adding extra freighter capacity from Hong Kong and Singapore.

The freight forwarder is adding two extra weekly flights – offering 100 tonnes of capacity each – to its Hong Kong-Liege-Hong Kong loop, bringing its weekly flights on the route to three.

Meanwhile, the company has also introduced a new weekly route from Singapore to Los Angeles.

DSV vice president and head of the DSV Air Charter Network, Mads Ravn, said: “Right now, the market is greatly underserved – especially out of Asia where the situation is being impacted these days by increased Covid incidents and by new restrictions. We are monitoring the situation closely, so we can continue to do what we can to keep our customers supply chains flowing.

“We are also introducing a new DSV Air Charter route from Singapore to Los Angeles (LAX), which can further relieve the pressure on some of the other hubs in the region and also bring a little more flexibility to our customers on our airfreight offerings out of Asia.”

The announcement from DSV came shortly after Cathay Pacific made “substantial reductions” in its long-haul freighter network for the first quarter, with no flights operating to Europe and just seven per week to the Americas.

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