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This all sounds like good news for AIR:
https://www.freightwaves.com/news/pressure-on-air-cargo-rates-from-china-keeps-increasing
"Outbound airfreight rates from China continued to rise for the fifth consecutive week, with pricing the strongest out of Shanghai as shipments increased for electronics, e-commerce orders, and hospital gear.
The pricing trend is good for carriers. But it means higher costs for cargo owners, especially with a large amount of all-cargo capacity already committed to big gadget launches from Sony, Apple and Samsung in the next couple months. There also is uncertainty about how many aircraft passenger airlines will put in the air as coronavirus outbreaks pop up.
Rates from China to Europe and the U.S. increased 6.7% and 5.8% to $3.51/kilogram and $5.46/kilogram, respectively, according to data compiled by The Air Freight Index Co. The Shanghai market was even stronger, rising 14.8% to Europe and 10.9% to the U.S. in the past week. Chicago to Europe rates also increased, but eastbound rates from the key hub of Frankfurt to the U.S. fell 3.8% as new capacity outstripped new demand.
Airfreight rates from Asia were several times higher in the spring. They started to fall in the spring, but are still about 25% greater than during last summer and heading up.
CLIVE Data Services, which consolidates data from representative international airlines, said planes on average were filled at 70% of capacity during July. The figure is very high considering summer is typically the low season for air shipping and the load factor during the traditional peak shipping season before the holidays is about 68%.
London-based CLIVE Data said cargo volumes increased 8% monthly in July, further evidence transport demand is trending upward as manufacturing and retail activity pick up following quarantine measures. Cargo volume, which CLIVE analyzes using a formula that combines weight and cubic space, was 20% below July 2019. That’s a significant improvement from the 26% throughput drop in April, compared to the prior year, and the 31% and 37% yearly contraction in May and June, respectively.
The refusal of some pilots to fly to Hong Kong after the city imposed aggressive COVID testing procedures and quarantine measures for air crews is reducing some air supply from a critical logistics hub. FedEx pilots are urging the company to suspend flights because of way Hong Kong authorities have treated some pilots, while pilots at UPS have asked for the option to decline flights there.
“This is beginning to have a quite serious productivity impact on many of the largest freighter operators and could mean there will be less surge capacity available for the peak season,” logistics provider Flexport said in a newsletter to customers.
The San Francisco-based company also reported that Taiwanese carriers, such as EVA Air Cargo, have announced a 20 to 25% rate increase effective Aug. 12. “It is anticipated that this is the first of
"The San Francisco-based company also reported that Taiwanese carriers, such as EVA Air Cargo, have announced a 20 to 25% rate increase effective Aug. 12. “It is anticipated that this is the first of many rate increases to come over the next few months,” it said
Trans-continental rail
The premium pricing and congestion at major hub airports is leading more shippers to consider rail from China to Europe as a less expensive alternative to air for a range of goods, including clothing, paper, consumer goods, electronics, and industrial components.
Rail transport is up to 50% faster than sea freight and up to 60% cheaper than airfreight, according to European logistics specialists.
Railroads have developed several routes over the past dozen years. Initially, logistics companies needed to book an entire block train, but now can offer less-than-container and container-load options.
The railroad joint venture that operates a line through Belarus, Kazakhstan and and Russia said July container volume of 54,200 TEU was 76% more than a year ago and set a record. China shipments to Europe doubled and loaded containers from Europe grew by 80%. For the first seven months of the year, traffic is up 267%.
Transit times average about 15 days, depending on the origin and destination points.
Earlier this year CEVA Logistics launched an intermodal product that trucks shipments from China to Vietnam and loads them into high-cube containers for rail transport to Europe.
Cargo.partner, an Austrian forwarder, recently introduced two new weekly LCL direct connections between Duisburg, Germany, and Hefei, China, as well as between Linz, Austria, and Xi’an. The company says it expects demand to increase in both directions.
Freight forwarder Davies Turner has responded to increased bookings on its weekly fixed rail service from China to Dartford, U.K. by adding direct service to Birmingham, Bristol and Manchester.
The weekly service departs the rail hub in Hefei and goes to Neuss, Germany. Containers are then trucked under bond to the Port of Rotterdam and transported by ferry to East London.
DSV Panalpina, which offers a rail service, also says its road transport service from eastern China to western Europe has gained popularity during the COVID-19 crisis.
Passenger network uncertainty
The wild card for cargo rates is the extent to which airlines resume passenger service. Although there have been blips of increased travel activity this summer, airline executives are more cautious about adding costly flights when the coronavirus is spiking in parts of the world.
U.S. passenger throughput, as measured by the Transportation Security Administration at airport checkpoints, increased last week for the first time in a month. For the week ending Thursday, the passenger level was 71.9% off of the same period in 2019, but airline ticketing numbers declined 0.4 points from the prior week."
More in article, including charts.