As the world attempts to stop the spread of the novel coronavirus, the airfreight sector has been dealt a blow as cargo volumes, particularly outbound traffic from China, nosedive.
According to a statement by derivatives broker Freight Investor Services (FIS), the coronavirus outbreak will definitely lead to supply chain bottlenecks in the short-term, which means airfreight volumes and prices have become unpredictable.
“Reflecting on the comments of many major freight forwarding veterans over the past few days, any degree of predictability is unlikely over the next few weeks,” it said.
“The lack of cargo moving into and out of China makes us cautious to set up an immediate assessment, as the majority of business revenues are unlikely to track index volatility until industrial production and movement of freight resumes at some point in the coming weeks.”
The majority of goods in China have been placed under quarantine, which has caused airfreight capacity and volumes to diminish substantially as cargo is unable to move.
FIS said the focus should be on increasing sea and airfreight capacity over the next couple of weeks, with reviews on-going for most major airlines.
“All eyes will be on how quickly air and sea carriers can muster capacity to provide suitable uplift for any freight volume spike, and how substantial and quantifiable this volume spike might be.” – Bjorn Vorster
