18 Mar Airfreight space is shrinking, and airfreight rates are rising sharply. Plan to use ocean freight service or expect your airfreight to take a lot longer and cost a lot more
Airfreight space is shrinking, and airfreight rates are rising sharply. Plan to use ocean freight service or expect your airfreight to take a lot longer and cost a lot more
The shipping industry continues to pivot around many country’s changing policies to combat the Coronavirus COVID-19. As countries including the USA put travel restrictions and bans into place, companies like LRI on the front lines of cargo movement must adjust to what services can still be accessed. We are working with our partners all over the world to come up with creative routings, as well as guiding our clients to alternatives such as ocean freight services and trucking cargo further on continents than we might normally because of a lack of air cargo space for flights that would have previously been the go-to option.
As of now, few passenger flights are operating to or from China, most of Europe (check with LRI on specific countries), the UK, Ireland, the Philippines and Saudi Arabia with more countries expected soon. Cargo flights are still operating into and out of those countries and some cargo carriers have introduced more flights to increase capacity. This has been a ray of positive light in an otherwise very difficult market to manage. Another positive development in the USA is the Department of Transportation (DOT) has eased the E-log requirement for truck drivers effectively allowing them to drive for longer to keep cargo moving in this hampered freight market. Air cargo rates continue to rise dramatically. In some cases, with cargo freighters, the rates have only risen 30%, but in high volume markets the rates are up as much as 300%.
Ocean shipping is starting to recover a little from the lack of equipment and space due to the extended Chinese New Year, however there are still empty container shortages and rates are expected to increase 2-3 times between now and December 2020. The average container price increase is $200.00 but as much as $750-$1000 per container is a possibility in some high-volume markets or for special equipment. If your cargo is not urgent, we would recommend not even bothering with airfreight bookings and looking at ocean freight. The air cargo market is rather volatile at this time and will continue to change daily. Ocean freight service, space, equipment and rates, while dramatically different than normal, are more predictable at this time.
Customs services both in the USA and globally are working. In some cases, the personnel and schedules are decreased/modified and all are working on testing for coronavirus in passengers on top of cargo processing so customs releases worldwide are slower. Ports and airports are operating for cargo even if they are closed to passengers from certain countries/regions. Some ports and airports are at slightly lower staffing or “skeleton staffing” so it resembles a holiday at this time, but freight is being processed for export and import.
LRI office and warehouses remain open. We are working every day to manage your International cargo while practicing social distancing in our office and doing all of the recommended advice from the CDC as well as our State and Federal governments. LRI has an action plan in place for employees to work from home should the need arise. We will be available to our clients, vendors and partners even if a mandatory quarantine is required. To test this process, we will have a work from home trial day on March 19. 80% of LRI staff will work from home on Thursday March 19. We encourage our clients to provide feedback to us about your experience on March 19 and we expect the service to be exactly what you have come to expect from us at LRI just like a normal workday. This “test day” will give us valuable information we can use later if working from home becomes required for a period of time.
Thank you for your patience as we work through this global situation. We appreciate your business and support! We commit to provide our service to you with the highest quality possibly under the circumstances.
Please Note: Later this week, we will be publishing another E-BLAST with a link to our website and a list of countries and regions and their freight operating capabilities due to the Coronavirus COVID-19. We have communicated with our partners in over 100 countries to obtain information and as it is coming in, we will occasionally be updating the list of information from the ground in each of these countries.