Chen Monian was transporting cartons of personal protective equipment (PPE) from a container truck to a cargo terminal at the Shanghai Pudong International Airport when the watch showed it was time to clock out.
During that pause in a late April shift, he recalls, he thought it was probably the busiest day of his eight-year working life as a forklift driver with Shanghai-based firm Jiujin Logistics.
The coronavirus pandemic was then spreading fast, claiming lives, crippling airlines, shutting factories, and killing jobs. Demand for medical devices was surging, forcing Chen and his colleagues into the gruelling task of loading them for export to the US, Europe and elsewhere.
“The volumes of masks, hospital equipment and medical devices bound for all over the world created a hectic scene like never before,” he said. “You cannot imagine how strong the business was like at that time.”
The air freight chart captures those hectic months Chen described as “chaotic” – as airlines cancelled flights and took out the cargo space in their bellies along the way, upending the fundamental balance in the logistics industry.
Shipments from Pudong to North America surged fourfold to as high as 73.80 yuan per kg (US$10.40), according to the TAC Index compiled by The Air Freight Index Company based in Hong Kong. From Hong Kong, the shipment rate soared 2.5 times to HK$65.69 (US$8.5).
“It was a different world altogether in the air freight business,” said Jiang Hai, an operations manager with freight forwarding company Tenglong. “In April, some of the trucks had to spend three days in queues before they could drop off their shipments at the terminals. Some planes were forced to leave without their loads because the trucks were stuck outside the terminals.”
Since May, however, signs are signalling a slow return to the old world. The gridlock at cargo terminals has eased, more economies are reopening as the race for the Covid-19 vaccine intensifies. Carriers are returning more planes to the sky and air freight rates have retreated from their peaks.
The stock of Shenzhen Mindray Bio-Medical Electronics – the ventilator manufacturer controlled by Singapore’s wealthiest man, is wobbling a little, coming off a 57 per cent rally this year that added 126 billion yuan to its market value.
In a selfish way, we hope that the vaccine will not arrive too early
Xiong Hao, assistant general manager, Shanghai Jump International Shipping
“I think we will lose some business from the PPE goods but will see an increase in goods from other categories, such as food and machinery components in the second half of this year,” said Xiong Hao, an assistant general manager at Shanghai Jump International Shipping Co. “In a selfish way, we hope that the vaccine will not arrive too early.”
A vaccine or cure for Covid-19 could eventually rein in the cost of moving goods, as the TAC Index shows. Aviation data, however, signals it won’t happen in the immediate term.
There were 3,714 air cargo flights from Shanghai Pudong airport in April, a 73 per cent increase year on year. In May, the number of international flights more than doubled to 4,910, according to VariFlight, a civil aviation data services by Hefei, Anhui province-based Feeyo Technology Co.
“Our drivers [in Shanghai] were working round the clock [in April],” said Jimmy Zhang, executive director of Kerry EAS Logistics, a unit of Hong Kong-listed Kerry Logistics, which has increased its workforce from 100 to more than 500. “They had to wait outside the airport for up to 28 hours before dropping off the shipments.”
Xiong at Shanghai Jump International Shipping said trucking companies have turned away demand despite offers at several times the average rates.
“They were offered lofty prices to secure truck services but many of the owners refused to do the business because they balked at the gridlock at the airport.”
Workers like Chen are least perturbed, overwhelmed by their busy schedules and assured of job security, at a time when many of their blue-collar peers in other industries have lost their jobs during the country’s worst economic slump since the Mao era.
Zhongtai Securities predicted that up to 70 million workers could have lost their jobs owing to the economic downturn this year because of the pandemic. This translates into an actual unemployment rate of around 20.5 per cent, it said.
“I feel very lucky because the logistics industry is one of the few bright spots during this pandemic crisis,” Chen said.
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