All packed up and no place to go

With inventories low and ocean shipping backlogs delaying imports of consumer goods for weeks or even months, many U.S. importers are shifting from ocean to air. Normally, that would be an effective, if expensive, strategy, but as the COVID-19 pandemic grinds on, it has exacerbated some of the very problems shippers were trying to avoid: capacity constraints, congestion, and delayed deliveries.

In October 2021, international shipments (measured in cargo tonne-kilometers) were up 10.4% compared to October 2019, according to the International Air Transport Association (IATA). (IATA made its comparisons to pre-pandemic traffic.) Capacity was 8% lower than in October 2019, still problematic but a big improvement over the precipitous drop seen in early 2020. Capacity constraints are “slowly resolving” as increased passenger travel brings more belly capacity for cargo online, IATA said, but Director General Willie Walsh warned in early December that if governments’ reactions to the omicron variant dampen travel demand, “capacity issues will become more acute.”

For North American air cargo shippers in particular the situation remains very challenging as a confluence of issues slows shipments and raises costs, said Brandon Fried, executive director of the Airforwarders Association, at the Coalition of New England Companies for Trade (CONECT) Trade & Transportation Conference in Newport, R.I. Only about 25–30% of trans-Pacific cargo capacity has been restored so far, keeping rates high, he said. Charters for 747 freighter aircraft that had been around $750,000 reportedly jumped as high as $2 million but are starting to show signs of drifting downward, Fried said.

Air carriers are doing what they can to maintain or increase capacity. According to Fried, approximately 120,000 passenger aircraft flights have flown freight-only since the pandemic began. At Chicago’s O’Hare International Airport some freighters from China land, unload, and take off again, returning the next day with more consumer goods. To reduce congestion and keep cargo moving quickly, more airlines are landing at secondary airports like Hartford, Conn., Pittsburgh, Pa., and Rickenbacker International outside Columbus, Ohio—so many, he said, that Rickenbacker, which caters to air cargo, had to cap the number of flights it accepts. 

Moreover, labor shortages related to the pandemic and to the time-consuming, difficult task of qualifying for and receiving security credentials are causing flight cancellations and slowing cargo processing. Inbound shipments often do not move out of cargo facilities quickly, which creates congestion; one conference attendee said it has been taking seven to 14 days to get international cargo out of John F. Kennedy International Airport in New York. A lack of investment in cargo infrastructure at major airports has exacerbated those bottlenecks, Fried added, noting that hours-long lines at some airports are chasing truckers away.

As if the pandemic-related difficulties weren’t enough, in 2021 the International Civil Aviation Organization (ICAO), a United Nations agency that provides technical expertise and recommends aviation policies for member governments to adopt, eliminated a program that specified security controls for all-cargo aircraft that differed from those for passenger aircraft. Since then, the U.S. Transportation Security Administration (TSA) has required physical screening of all international cargo on freighter aircraft.

“We are getting it done,” but it’s not easy, and Fried’s group as well as other forwarders’ organizations, integrated carriers, airlines, and shippers have been meeting with TSA on ways to expedite screening. One success: TSA is allowing approved third-party K-9 handlers to use dogs to screen for explosives and other contraband. That’s proving helpful, Fried said, but there likely aren’t enough approved, trained dogs and handlers to fully meet screening needs now or in the future. Less successful was TSA’s proposal for “secure packing facilities” that would exempt e-commerce companies that met very stringent security standards from some of the screening requirements. According to Fried, the “bar was set so high” that only one company is trying to implement the standards.