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As with ocean freight, cargo transfers from PVG are expected, but not without further difficulties. Grant Liddell, managing director of Metro Shipping, said: "Moving cargo to other airports often increases trucking and air freight costs and increases overall transit time."
Air freight prices in China have stabilized over the past week after recovering from a three-month low in early March, according to TAC Index, a provider of air freight rate data. The index showed that the price of air freight between China and the United States was US$8.54 per kilogram, up 0.2% from last week, but up 22% from US$6.97 on March 7. Central European air freight was $7.27, down 1.5% this week but up from $6 three weeks ago.
TAC general manager Peyton Burnett said there were two pricing mechanisms at work. He explained: “Bunker prices have risen sharply, which has pushed up airfreight prices. Shippers are now forced to accept bunker surcharges, so they are sorting through old contracts from more than eight years ago to review the various bunker surcharge terms.” On the other hand, Burnett said that the epidemic prevention and control is putting downward pressure on freight rates as production and domestic transportation are affected.
The measures to prevent the spread of the virus come as the air cargo industry grapples with the loss of capacity and rising fuel prices caused by the conflict between Russia and Ukraine. Western sanctions have driven Aeroflot Cargo out of the market and Russia has closed its airspace, which has extended routes between Asia and Europe. Loss of shipping supply coupled with higher operating costs has pushed up freight rates over the past month
