The COVID-19 crisis has significantly affected the air travel industry, and airports including Seattle-Tacoma International (SEA) are seeing reductions in the number of passengers flying by 90% or more. This also means fewer airplanes are flying, which has an impact on air cargo logistics and trade.
You may not know that air cargo is regularly carried on passenger planes – sometimes a little, sometimes a lot. When those passenger aircraft don’t fly, cargo that would have flown aboard, called belly-cargo, is grounded too. Overall, about a third of all air cargo moving through SEA flies on a passenger plane. This number rises to nearly two thirds when looking only at international air trade, owing to the considerable capacity of long-haul intercontinental jets to carry cargo – up to 30 metric tons, or more depending on passenger loads, per flight. These direct flights between major cities are an attractive option for shipping trade commodities by air, particularly for perishable products such as seafood, and provide an attractive mix of flight frequency, travel time, and cost to ship.
For the first quarter of 2020, belly cargo overall at SEA is down by 7.1% (off 28.4% in March alone), and international belly-cargo is off by a similar amount (down almost 30% in March). Early in the quarter, belly-cargo was growing, due to several new services started in 2019. Many direct international passenger services are now suspended, including to key export markets such as Beijing, Shanghai, and Hong Kong. For those shippers who rely on frequent, direct, and affordable belly-cargo service to get their products to overseas markets, their preferred transport mode may be unavailable.
Total international trade by air through the airport is down 10.7% for the quarter, but believe it or not, the total of all air cargo tonnage that moved through Seattle in the first quarter actually increased compared to Q1 2019, by 3.2%! So, what’s going on?
The answer is freighters, which carry two thirds of the cargo moving through the airport. Specifically, the domestic freighter market is booming.
There are two main categories of all cargo freighters at SEA: a) very large, mostly foreign-flagged aircraft plying international import/export routes, operated by airlines including Asiana, Cargolux, Korean Air, or Lufthansa; and b) mid-sized freighters flying to domestic hubs providing express and e-commerce shipments. These freighter flights are not affected by either travel bans or a reduction in travelers and are either holding steady or in some cases increasing cargo volumes or flight frequencies. The second category, domestic express and e-commerce, is sharply increased during Q1 propelled by greater online ordering and a shift of cargo from suspended domestic belly-cargo routes.
Freighter-carried air cargo is up 10.0% for Q1 (+16.1% in March), and domestic all-cargo is up by 16.7% for Q1 (+25.4% in March). High growth in this dominant sector of the Seattle air cargo market is thus masking declines on the international side, and particularly in belly-cargo.
While e-commerce is rising and air cargo is increasingly carried aboard freighters, frequent shippers of perishable products are uniquely impacted by the loss of belly-cargo capacity. Even as demand picks up in China and Hong Kong, these producers are unable to get into these markets. Seattle’s direct Asia freighter flights are limited to South Korea and Taiwan, and the cost as well as the transit time are prohibitive to industries like shellfish.
What alternatives may help those shippers stranded by the suspension of most belly-cargo? Seattle is now seeing a new mode of air cargo happening at many airports across the world. A number of airlines are now flying passenger jets only for the cargo that can be carried. EVA Air began scheduled service of cargo-only passenger aircraft at SEA on April 15, with more capacity for cargo than a normal flight owing to the lack of passengers or their luggage. Some airlines such as EVA are filling only the normal belly hold with cargo, while others are experimenting with carrying cargo in the former passenger areas. Small to midsized boxes can be stacked in the seats or placed in the overhead bins. Other airlines are removing seats from certain aircraft, so cargo can be arranged more efficiently, and greater capacity can be achieved. Displaced regional shippers are hopeful more airlines will adopt this practice at SEA, particularly on routes with no current service.
Seattle-Tacoma International Airport is the Pacific Northwest region’s air cargo gateway hub. The airport understands how important it is to keep commerce moving by air, and to support shipments of needed supplies into our area. The airport and its aviation partners have instituted measures to keep employees safe, such as increased availability of hand sanitizers and maintaining appropriate distances, so that we can continue providing air cargo service for the region. Even as passenger numbers dwindle, SEA will remain open to keep commerce flowing during the COVID-19 pandemic.