Weekly Wrap: COVID layoffs, e-commerce charters and a regional update [VIDEO]

This week, Air Cargo World launched the layoff tracker, covering air cargo logistics layoffs from the COVID-19 pandemic. This has been mitigated for now in the United States by federal relief programs, and this week, major cargo handler Swissport announced it had received $170 million in relief funds to support its U.S. payroll. Meanwhile, cross-border e-commerce demand has soared thanks to lockdowns that have turned the retail tide in favor of online shopping compared with brick-and-mortar. Cainiao, the logistics arm of Chinese e-commerce giant Alibaba, has launched a new Hong Kong-Madrid route operated by Volga-Dnepr Group subsidiary AirBridgeCargo in support of cross-border e-commerce, with many more charters ahead for 2020. Finally, Latin America has been hit particularly hard by the lockdowns and passenger flight cancellations. With some service in the Americas beginning to return, cargo capacity is slowly returning in passenger aircraft bellies. Still, a forwarder with a large South American network tells Air Cargo World there is a long way to go in terms of reopening capacity. Find this and more in this week’s edition of the Weekly Wrap, featuring Editor Caryn Livingston and Publisher JJ Hornblass. https://vimeo.com/439402477 A transcript is available below. This transcript has been generated by software and is being presented as is. Some transcription errors may remain. JJ Hornblass 0:01 Hi, everyone. I'm JJ Hornblass and welcome to On Air the podcast of Air Cargo World since 1941, the leading magazine for the air freight industry. I'm the publisher of Air Cargo World, and I'm so pleased to join Caryn Livingston who's the editor of Air Cargo World. Hi, Caryn. Caryn Livingston 0:23 Hi, JJ. JJ Hornblass 0:25 This is the weekly wrap up for what's happening in air cargo for the week of July 13. And, before getting to our discussion, I want to thank our sponsors, Alaska Airlines cargo, American Airlines Cargo, Apex Logistics, Hawaiian Air, Incheon, Southwest and United Cargo. Thank you to our sponsors. It is July 17, 2020. There was a significant aid package that was delivered to Swissport. This week, Caryn. And maybe you can first tell us a little bit about the aid that Swissport got. And why this is so significant how, why Swissport is so significant to ground handling for the air cargo space. Um, and what the, let's start there. Caryn Livingston 1:28 Yeah, so Swissport is, of course, a Swiss company, but they do have a pretty large US operation and the $170 million in aid funding they received from the US government from an aid package, intended to support aviation during the COVID-19 pandemic and to avoid layoffs. So, this, this aid that they've received specifically will support their US payroll. And it is a pretty large package. They're definitely not the only Air Cargo operator or aviation provider who has received a package like this and some of the passenger airlines have received larger packages. But on the air cargo side, this is pretty, pretty substantial. And that kind of reflects the size of some of the larger ground handling operations. So, according to Swissport, about 10,000, their employees were laid off globally during the pandemic, with another 40,000 temporarily furloughed and so they've since brought back about 5,000 of those employees. But this aid package should give some support to their us operations and hopefully prevent additional layoffs. Although They did tell us that, you know, a lot of that depends on the overall state of the industry, which is really difficult to predict what's going to happen at this stage. JJ Hornblass 3:11 I mean, the ground handling is so you're not doing air cargo without ample ground handling services in there. And Swissport is, is, I believe, the largest ground handler in the world. Caryn Livingston 3:27 Yeah, that's certainly one of the largest. They're definitely among the top handlers. And yeah, you're right that, you know, at every airport, if an airline isn't handling their own cargo, then they need to hire someone to do that. And with Swissport having operations all over the world, they have, I believe they had more than 60,000 employees before the pandemic began. JJ Hornblass 3:54 So that really puts that 40,000 number of furloughed employees into perspective. What when you look at that number? I mean, what does that say to you about kind of layoffs throughout Asia or the potential for layoffs throughout aviation? You know, that seems it seems a big number to me, Caryn. Caryn Livingston 4:18 Yeah. It certainly is. It's building up to a big number. So a lot of the major carriers, including in the US have announced plans to initiate layoffs. Many of those carriers have also received aid that bars them from laying off employees for a certain amount of time. I think that is set to expire in October, which is when many of these airlines have said they will have to begin initiating layoffs. If no additional aid packages are extended, and kind of to that point Air Cargo World also this week alongside the this Swissport story has launched. A larger industry layoff tracker so we so we're looking to keep track of the overall layoffs in the industry not just in the US but around the world. So certainly if you if you read that story you can access the layoff tracker JJ Hornblass 5:18 At AirCargoWorld.com Caryn Livingston 5:19 Right exactly. JJ Hornblass 5:22 There was interesting news out of AirBridgeCargo that they had a security charter arrangement to fly for Alibaba's logistics arm and you know that was its one route it's the Hong Kong Madrid route that they're flying. And of course AirBridge is a subsidiary of Volga-Dnepr Group in Russia. They are pushing a lot of charter flights at this point. And where do they rank kind of globally in terms of consumption of charter flights? I mean, is this 1260 charter flights for 2020 on behalf of Alibaba, this has got to rank among the largest number of charter flights for one particular enterprise right care. Caryn Livingston 6:35 I mean, it's definitely substantial. A lot of the charter flights that we've covered so far this year have been for the transport of personal protective equipment related to the pandemic. But e-commerce has also seen a huge increase as people you know, who aren't or either aren't able, aren't allowed due to lockdowns or aren't willing to go out to brick and mortar retail stores. shopping at home instead. And so that seems to be what's driving the, you know, the pretty extensive charter arrangements that sign now is making right now on behalf of Alibaba. JJ Hornblass 7:16 So you would, I mean, considering the growth rate, I saw that there's a pretty significant growth rate at Alibaba, just like other e-commerce providers. I mean, would you think that the number of charters in 2020 is going to have to go up even higher for now? Caryn Livingston 7:38 It's really hard to say especially as right now, you know, typically, Alibaba has its really large season around 11.11, Singles Day shopping. JJ Hornblass 7:50 Which is fast approaching. Caryn Livingston 7:53 Yeah, it's coming up and it's really not clear what that will look like. Of course, with you know, the layoffs we just discussed, people may be less willing to spend as much this holiday season but on the other hand, you know, people are wanting to support the economy, people are still needing to shop for things. And so it seems very possible that we'll continue to see these charter flights, maybe even accelerate toward peak season. JJ Hornblass 8:22 There are other I mean, are there other carriers that are particularly oriented towards the 11.11 Singles Day shopping spree as it is? Caryn Livingston 8:36 Well, on that note Volga-Dnepr Group is kind of the leader. This, the arrangement with Volga-Dnepr Group actually predates the pandemic. They signed an agreement with Alibaba back in December 2018. And so this, this kind of arrangement, you know, has been in the works for a while but the pandemic has accelerated it substantially and really increased the demand for cross border air freight shipments on behalf of Cainiao. JJ Hornblass 9:12 Yeah. We also this week there was also news that cargo capacity has grown in Latin America. Latin America has a How shall we say this? Caryn has been the hardest hit region in the world. vis-a-vis cargo and cargo traffic. I think that's fair to say. So this seems like the news of the greater capacity and sort of demand returning for passenger flights. They're kind of older more important considering beyond the potential for you know, that these carriers that have declared bankruptcy, am I reading that correctly I mean what is sort of the story behind this Latin America situation? Caryn Livingston 10:07 Yeah so Latin America, the airlines there as well was hit particularly hard by a lot of the lockdowns and the decrease in passenger traffic. So far LATAM Airlines group, Avianca and Aeromexico have all filed for Chapter 11 bankruptcy in the US and plan to reorganize. And they've all said that they'll continue operating these cargo flights and what passenger flights they can during the reorganization, but many of the countries are still under lockdown. And of course the Americas have been hit pretty hard by the pandemic and so a lot of travel restrictions remain in place here and in Latin America. So it is a good sign that we're starting to see some increases. Recent cargo capacity. Some of the major American carriers are also you know, they had canceled routes that they were operating to Latin America, and those are beginning to recover somewhat. And then with LATAM Cargo, they've continued operating their freighter fleet as well. But, uh, certainly, American carriers tend to operate fewer freighters outside of the major integrators than in some regions like Europe and the Middle East. So that's certainly had a pretty negative impact on operations in the region. And, you know, the demand is there, especially for perishable shipments. This is a big time for perishables and you know, in the Americas Summer is here. So, hopefully, we'll start to see some capacity returning beyond these early signs that it may be coming back. JJ Hornblass 11:57 So you think that do you think that the lack of freighters from the US side of the equation kind of almost like bodes well for the Latin American carriers that this might be kind of a way to bootstrap them out of this this particularly bad situation. Caryn Livingston 12:15 It's certainly a benefit to those carriers that they do have freighters they can operate, but also a lot of, you know, the Latin American carriers and the North American carriers have been operating the passenger freighters, so passenger planes in cargo-only service. But, of course, that's not as economically advantageous as a full freighter operation. So it should benefit those carriers. And I believe it has been but the passenger impact has really had a negative, you know, negative side to them. JJ Hornblass 12:50 Right. Okay. So Caryn, what are you working on for next week? Caryn Livingston 12:57 Well, next week, we have the publication of two feature stories planned. So I think first up, we'll have a look at how customs and regulatory issues have been affecting the shipment of personal protective equipment from China. It's had, you know, some pretty substantial effects on some of the shipments and has contributed to kind of the slow distribution of PPE in some cases. And then we'll also take a look at how the pandemic is impacting e-commerce, which, as we kind of mentioned earlier in the Alibaba story, and people sitting at home, you know, they still want to shop and so the supply chain has really shifted, there's been a big shift from, you know, a much larger share of B2B shipments are now moving B2C and that has a whole host of implications for the supply chain. JJ Hornblass 13:57 Yeah, yeah, you also have, with everyone working from home, there's a certain amount of, you know, business supplies that are kind of now going to residential offices, as it were. So there's also that. All right, so we're looking forward to that. Thanks, Caryn. And I want to thank everyone for joining us on the On Air podcast, we'd love to hear from you. So please be sure to rate us on whatever podcast platform you use. And as always, please visit us at AirCargoWorld.com where we'll have a whole host of good information and insights available to you. Again, thanks, everyone for joining us, and we'll see you next time.

Weekly Wrap: COVID layoffs, e-commerce charters and a regional update [VIDEO]

Changes at Amerijet as Air Canada’s Strauss takes CEO role

Consultant Insight: DFW offers Texas-sized benefits for shippers

Related Posts

iAero receives approval for cargo charters to Cuba

WCS 2021: Runaway cargo e-booking growth presents data analysis opportunities

ANA Cargo commences SAF freighter flights fueled by Japanese forwarder trio

WCS 2021: Industry must invest in sustainability to reap benefits tomorrow

WCS 2021: Most industry participants have now adopted digital strategy

Capacity constraints contribute to Delta’s growing cargo revenues

WCS 2021: Power-to-liquid SAF most promising for long-term scaling

ASL looks ahead to hydrogen as fuel source

WCS 2021: Pandemic delivers double-digit e-commerce growth, optimization to follow

Consultant Insight: DFW offers Texas-sized benefits for shippers

FROM OUR CONTRIBUTORS

Consultant Insight: Strong retail sales continued in September, but how much longer can it last?

Consultant Insight: DHL reports strong preliminary Q3 financials

A forwarder’s reflection on 9/11 and aviation security

SPONSORED

Singapore Changi Airport: Taking your pharma business further

CODEX by Virtual Control fills gaps in cold-chain shipment visibility

Digitizing the ULD transfer process and protecting shipments with Virtual Control

Follow Us

Weekly Wrap: COVID layoffs, e-commerce charters and a regional update [VIDEO]

Changes at Amerijet as Air Canada’s Strauss takes CEO role

Consultant Insight: DFW offers Texas-sized benefits for shippers

Related Posts

By subscribing you agree to our Terms of Use and Privacy Policy

FROM OUR CONTRIBUTORS

Follow Us