As airlines cut China flights, there’s less room for cargo
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U.S. and international airlines are suspending flights to mainland China to try to contain the coronavirus. Delta, American and United airlines are suspending many flights until at least the end of March.
Fewer flights make personal and business travel nearly impossible — but there’s another big impact: cargo.
There aren’t many people flying in and out of China right now, and Dawna Rhoades at Embry-Riddle Aeronautical University said that means less capacity for crates and pallets, too:
“What most people probably don’t think about is a sizable portion of the air freight actually comes in the belly of an aircraft, so it’s in that section that most passengers think is where all their luggage is,” Rhoades said.
Depending on the plane, a flight can carry the equivalent of two semitrucks’ worth of cargo.
According to figures from the International Air Transport Association, cargo generates 9% of airline revenues globally — more than twice that of first-class tickets.
Jesse Cohen, an air cargo and freight transportation consultant, said for flights from China, that can sometimes be even higher.
“[On] a really good passenger flight, you might see 15% to 20% of the revenue on that flight being generated by cargo,” Cohen said.
Some of that money comes from businesses that sell perishable goods like food and flowers, which need rapid shipping.
But Cohen said high-value products, like laptops and cellphones, are also worth paying the extra to send by air so they’re not tied up at sea and can get to market quickly.
“A lot of your electronics, higher-end electronics, are manufactured in China, assembled in China, and shipped over by air cargo,” he said.
About one-third of air cargo is transported on passenger planes, and the rest goes on freight-only flights. They’re still flying to China. Neither FedEx nor UPS wanted to do an interview, but both said they’re following federal guidance and they’re giving advice to crews on how to stay safe.
And there is one type of shipment that hasn’t seen a downturn, said Eric Kulisch, the air cargo editor at FreightWaves.
“You’re seeing medical supplies going in, whether it’s masks, gowns, relief supplies,” Kulisch said, adding that the economic effects of the flight suspensions are not as bad as they might have been. It’s after the busy holiday shopping season in the United States, and the Chinese New Year holiday means factory output would have been lower now anyway, reducing demand for shipping of all types.
COVID-19 Economy FAQs
What does the unemployment picture look like?
It depends on where you live. The national unemployment rate has fallen from nearly 15% in April down to 8.4% percent last month. That number, however, masks some big differences in how states are recovering from the huge job losses resulting from the pandemic. Nevada, Hawaii, California and New York have unemployment rates ranging from 11% to more than 13%. Unemployment rates in Idaho, Nebraska, South Dakota and Vermont have now fallen below 5%.
Will it work to fine people who refuse to wear a mask?
Travelers in the New York City transit system are subject to $50 fines for not wearing masks. It’s one of many jurisdictions imposing financial penalties: It’s $220 in Singapore, $130 in the United Kingdom and a whopping $400 in Glendale, California. And losses loom larger than gains, behavioral scientists say. So that principle suggests that for policymakers trying to nudge people’s public behavior, it may be better to take away than to give.
How are restaurants recovering?
Nearly 100,000 restaurants are closed either permanently or for the long term — nearly 1 in 6, according to a new survey by the National Restaurant Association. Almost 4.5 million jobs still haven’t come back. Some restaurants have been able to get by on innovation, focusing on delivery, selling meal or cocktail kits, dining outside — though that option that will disappear in northern states as temperatures fall. But however you slice it, one analyst said, the United States will end the year with fewer restaurants than it began with. And it’s the larger chains that are more likely to survive.
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