How Coronavirus is Impacting Shipping: Air Cargo, Ocean Freight, Trucking, and More

Last updated: October 20, 2020 


How coronavirus is impacting the economy and the global supply chain

With the holiday season kicking off, import volumes are high as retailers restock inventory in anticipation of seasonal surges. 

The rapid growth of eCommerce and peak shipping season are contributing to record freight rates that aren’t expected to drop before the end of the year. 

In addition, the race for a vaccine is also heating up, and its global rollout will be the next major challenge to supply chain stability.

Ocean freight and coronavirus

Following complaints and scrutiny, China-US ocean rates have gone unchanged for a month.

Ocean carriers cancelled planned mid-month rate increases, with some announcing that GRIs would be postponed until mid-November despite very full ships

Ocean capacity has been tight, thanks to a surge in eCommerce during the pandemic.

With high volumes of inventory heading to holiday shoppers and concerns that last-mile capacity will be very limited, some are warning of an impending “shipagedon” of delays and disruptions this season.

Air freight and coronavirus

High ocean rates and COVID-19 related delays are driving demand for air cargo and contributing to a continued increase in air rates

Rates out of China increased 15% on average this month, and are now at about 40% of their May peak.

Prices are expected to keep climbing since capacity is still constrained by a lack of passenger flights, but aren’t expected to reach the extreme peaks seen before the summer.

Trucking and coronavirus

Trucking is experiencing a much needed rebound.

Trucking volumes, rates, and employment have been climbing since summer, especially out of West Coast ports.

More than 14,000 trucking jobs have been added over the last two months, and with Peak Season at hand, parcel carriers will add thousands of seasonal workers to manage logistics services.

Amazon shippers and coronavirus

Last week’s Amazon Prime Day kicked off the eCommerce peak season, with record sales during the event and a 60% annual increase in sales by third party sellers on its marketplace. 

There has been a reduction in shipments to FBA warehouses. This is likely because importers must split shipments in order to stay under the required SKU limitation imposed by Amazon FBA.

Read up on how Amazon sellers can deal with rapidly-changing consumer demands as well as inventory challenges.

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Preparing for Peak Season 2020 with coronavirus

Peak Season 2020 has many importers wondering how to prepare for unpredictable conditions. Despite potential delays and high freight shipping costs, there are a few steps importers can take right now:

How to navigate the current freight market:

  • Compare at least a few quotes and modes to make sure you are getting the best cost and most efficient service possible.
  • Buffer your freight budget and transit time for changes. Costs due to unforeseen delays or limited capacity can arise, so be prepared.
  • Explore warehousing options to mitigate the effects of lowered demand and business restrictions in the US.
  • Pay attention to the profitability of your goods and consider if a pivot could be worthwhile. Additionally, remember to factor in freight costs when assessing profitability. 

How small or midsize importers can plan for operational success on Freightos.com:

  • Understand that delays and extra charges may arise. Freight forwarders are trying their best to move goods on schedule without additional fees, but in this unstable period, delays and additional charges can occur out of forwarders’ control. 
  • Consider which shipping mode is best for you right now. As during non-pandemic times, ocean freight is typically far cheaper but has significant lead time. If your transit time demands it, ship by air and you’ll have confidence in the transit times. 
  • Book now if you can. Freightos.com is fully operational, so book orders now to get goods moving as quickly as possible. 
  • Ship closer to your goods’ ready date to avoid rate changes. With the current shipping climate, booking too far in advance may mean rates change before your goods are ready. 
  • Communicate regularly with your freight forwarder. This is more important than ever – staying in touch means you’ll have a better handle on your transit time and stay on top of any changes that may arise. 
  • Make sure that you have manpower to accept your goods at arrival. This will minimize delays. 

How to stay informed: 

As always, we at Freightos.com are here to help. Please reach out if you have any questions or concerns.