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

Last updated: September 21, 2020 


How coronavirus is impacting the economy and the global supply chain

With months of COVID-19 related volatility and no end in sight, importers continue to face uncertainty in freight pricing, capacity, and demand volume across all modes of transport. 

Carrier capacity management in the first five months of the pandemic kept freight afloat, but June’s demand surge sent rates spiking and these increases have continued throughout the summer and into peak shipping season. 

Alongside peak season 2020, from October 1st to 8th manufacturing will shut down in China for the Golden Week holiday causing additional disruptions, surges in volume, and potential rate increases.

Ocean freight and coronavirus

Ocean rates from China to the US have continued their steady climb with six consecutive general rate increases (GRI) since June 1, 2020.

An anticipated seventh GRI mid-September would push China-East Coast rates to nearly $4,500 per FEU and West Coast rates up nearly 160% over last year.

The extremity of ocean freight pricing has propelled the Chinese Ministry of Transportation, the US Federal Maritime Commission (FMC), and other industry groups to consider intervening to prevent additional increases.

Despite carriers restoring cancelled sailings, and possibly being prevented from blanking sailings on transpacific lanes over Golden Week, high demand is outpacing capacity and this will likely continue through October.

FBX 09/2020

Air freight and coronavirus

High ocean rates and delays are causing some importers to opt for the enhanced certainty and speed of air cargo, contributing to a continuing increase in air rates

Demand for air cargo will continue to rise in the coming weeks as retailers prepare for the holiday season and rush to beat Golden Week shutdowns.

This surge, combined with limits on capacity due to decreased passenger flights, is expected to drive air cargo prices even higher in the coming weeks.

Trucking and coronavirus

After a drop in the second quarter of 2020, trucking is experiencing a much needed rebound.

Trucking volumes, rates and employment have all climbed over the summer and into the fall, especially out of West Coast, with UPS, FedEx and USPS all announcing rate increases to handle a surge in volumes heading into peak season.

The growth of eCommerce is contributing to a steady increase in trucking demand, however supply chain disruptions persist.

Amazon shippers and coronavirus

With Prime Day likely delayed until October in hopes that the economy and consumer spending will have improved, Amazon posted new warehousing and delivery requirements for FBA sellers in preparation for an anticipated surge in orders.  

These restrictions are driving some FBA importers to seek third party warehousing options.

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

Compare quotes & access live expert support

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: 

  • Be sure to join Freightos.com Insiders, a community on Facebook, to connect with global importers of all sizes and share insights, tips and solutions during the spread of coronavirus.
  • Keep up to date on the industry with our resource roundup page.
  • Check out our daily FBX ocean rates index, which we are providing for free for the rest of 2020 to help you stay on top of freight rates.

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