EU travel restrictions to decrease transatlantic air cargo capacity

Dive Brief:

  • The Trump administration is suspending commercial travel from the EU due to the COVID-19 outbreak for 30 days beginning March 13 at midnight, President Donald Trump announced in an oval office address Wednesday night. The restrictions do not extend to the U.K. “These restrictions will be adjusted subject to conditions on the ground,” said Trump.

  • Cargo-only flights are not included in the restrictions.

  • The president’s announcement initially led to shock and confusion, as Trump stated in his initial televised address, “these prohibitions will not only apply to the tremendous amount of trade and cargo, but various other things as we get approval. Anything coming from Europe to the United States is what we are discussing.” He later tweeted the restrictions do not apply to goods.

    Hoping to get the payroll tax cut approved by both Republicans and Democrats, and please remember, very important for all countries & businesses to know that trade will in no way be affected by the 30-day restriction on travel from Europe.

    The restriction stops people not goods.

    — Donald J. Trump (@realDonaldTrump)March, 11, 2019[1]

Dive Insight:

Though the travel restrictions will have less of an impact on transatlantic trade than it originally appeared after Trump’s address, removing belly cargo space by dramatically reducing commercial flights will take a significant bite of out of the air cargo market on the affected routes. Cargo-only flights represented 3.3% of total flights originating in the EU in 2017, the most recent year for which data is available, and belly cargo takes a large and increasing share of total airfreight originating there, according to the EU’s 2019 European Aviation Environmental Report.[2] The amount of cargo traveling in the belly of passenger flights increased 55% from 2005 to 2017 while the tonnage of all-cargo flights decreased 2% in the same period.

If this new travel ban has similar knock-on effects as the one the Trump administration placed on flights from China in early February, shippers must be ready for a steep ascent in rates.

Airfreight rates from China to the U.S. increased 27% between Feb. 24 and March 9, according to the TAC Index. Flight cancellations in China have removed roughly 36% of capacity year-over-year according to an operational update from Agility Logistics.[3][4]

References

  1. ^ March, 11, 2019 (twitter.com)
  2. ^ 2019 European Aviation Environmental Report. (ec.europa.eu)
  3. ^ increased 27% between Feb. 24 and March 9 (www.supplychaindive.com)
  4. ^ Agility Logistics. (www.agility.com)

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