As airlines cut China flights, there’s less room for cargo
Share Now on:
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
So what’s up with “Zoom fatigue”?
It’s a real thing. The science backs it up — there’s new research from Stanford University. So why is it that the technology can be so draining? Jeremy Bailenson with Stanford’s Virtual Human Interaction Lab puts it this way: “It’s like being in an elevator where everyone in the elevator stopped and looked right at us for the entire elevator ride at close-up.” Bailenson said turning off self-view and shrinking down the video window can make interactions feel more natural and less emotionally taxing.
How are Americans spending their money these days?
Economists are predicting that pent-up demand for certain goods and services is going to burst out all over as more people get vaccinated. A lot of people had to drastically change their spending in the pandemic because they lost jobs or had their hours cut. But at the same time, most consumers “are still feeling secure or optimistic about their finances,” according to Candace Corlett, president of WSL Strategic Retail, which regularly surveys shoppers. A lot of people enjoy browsing in stores, especially after months of forced online shopping. And another area expecting a post-pandemic boost: travel.
What happened to all of the hazard pay essential workers were getting at the beginning of the pandemic?
Almost a year ago, when the pandemic began, essential workers were hailed as heroes. Back then, many companies gave hazard pay, an extra $2 or so per hour, for coming in to work. That quietly went away for most of them last summer. Without federal action, it’s mostly been up to local governments to create programs and mandates. They’ve helped compensate front-line workers, but they haven’t been perfect. “The solutions are small. They’re piecemeal,” said Molly Kinder at the Brookings Institution’s Metropolitan Policy Program. “You’re seeing these innovative pop-ups because we have failed overall to do something systematically.”
Marketplace is on a mission.
We believe Main Street matters as much as Wall Street, economic news is made relevant and real through human stories, and a touch of humor helps enliven topics you might typically find…well, dull.
Through the signature style that only Marketplace can deliver, we’re on a mission to raise the economic intelligence of the country—but we don’t do it alone. We count on listeners and readers like you to keep this public service free and accessible to all. Will you become a partner in our mission today?