Air shipment costs rising due to impact of COVID-19

As the COVID-19 coronavirus epidemic continues, we see its impact spreading to areas within the global mobility supply chain. We have seen obvious impacts to travel and immigration. In this article, we focus on the impact to international shipping with particular focus on the escalating costs for airfreight.  

When employees and their families are moved internationally, many are often provided small- to medium-sized air shipments. While long-term assignments have not grown nearly as much as short-term assignments recently, shipments do continue to be offered as a benefit to employees and the costs for those shipments going into China and surrounding areas have escalated in cost due to reduced capacity.

Easyship explains the factors and predicts the results in their article, "The Coronavirus: What You Need to Know About Its Effects on International Shipping:"

"A number of airlines - including American, United, British Airways, and Qantas - have suspended all service to and from mainland China. Others, such as Cathay Pacific, are reducing flights to Mainland China by up to 50% through March. We expect that there will be further reductions and suspensions of scheduled flights as the coronavirus continues to run its course, and that the supply contraction will cause unpredictable rates, reduced air freight capacity, and create delays. That alone will likely push up air freight prices."

Alerts and updates like the following from our partner, Arpin International Group, help to prepare mobility teams to go back to clients and support the proper setting of expectations on timing and cost issues for active relocations and assignments:

"While activity in China remains severely restricted, some airfreight carriers are reporting that limited service has resumed. For shipments that are able to be routed, airfreight rates have increased significantly. At this time, airfreight carriers expect the enforcement of higher rates to continue indefinitely. Further, due to the constraints imposed by the government in an attempt to curtail the spread of the coronavirus, we have been notified that emergency pandemic surcharges may be incurred for services taking place in China."

Additionally, when travel and household goods shipments are delayed, there is usually an increase in other costs like household goods storage and temporary housing. We are connecting directly with clients where there are increased costs expected.