- Geodis is using its own leased freighter aircraft starting this month for service between Hong Kong, Chicago, London and Amsterdam, according to a news release. This adds capacity on its main trade lanes in an airfreight environment where space is at a premium.
- The forwarder said the A330-300 aircraft, which is leased for a minimum of five years, will also fly between China and Europe during peak season.
- "With the continued strain on airfreight capacity, we wish to ensure a more sustainable supply of air cargo space for our clients and are therefore investing in this, our own, first dedicated freighter," said Marie-Christine Lombard, Geodis CEO, in a statement.
Air cargo capacity remains hard to come by for shippers as many passenger planes remain grounded due to limited travel demand during the COVID-19 pandemic. According to the International Air Transport Association, industrywide available cargo tonne kilometers in June were about 11% below 2019 levels. Dedicated freighters like the one Geodis has have had to pick up the slack.
Plenty of cargo is still coming air carriers' way as port congestion and container shortages have hobbled companies' supply chain operations in Southeast Asia. Urban Outfitters, for example, sources much of its apparel from Vietnam, and the company is bringing in most of its product by air transport to minimize ocean-related delays it's encountering in the country, CEO Richard Hayne said on the company's Q2 earnings call. Hayne didn’t specify who the company was using for air freight services.
"So that's all going to impact margins," Hayne said. "But we believe that bringing the inventory in as quickly as we can is the most prudent thing to do right now."
All of Geodis' airfreight products are available for flights on its newly leased aircraft, but it "will also provide the opportunity and flexibility to operate dedicated full capacity flights for its customers when required," the company said.
"Our AirDirect service has operated more than 650 air charter flights so far across Asia, Europe, North and Latin America in order to secure capacity for our customer shipments worldwide," said Eric Martin-Neuville, executive vice president freight forwarding of Geodis, in a statement. "The experience gained from these operations has led to the decision to charter our own GEODIS Freighter."
Chartering ships is also gaining more steam as major retail importers look to secure capacity in a congested environment. Both Walmart and The Home Depot have done this to replenish inventory levels.
Geodis' aircraft will start flying three times a week between Chicago and Amsterdam/London, and it will also fly weekly rotations between Hong Kong and Amsterdam, the company said.
The airfreight market out of Hong Kong "is tight with limited capacity supply while demand remains strong," Flexport said in a Tuesday market update. Far east westbound rates, along with booking and transit times, are likely to increase, it said.
Transatlantic volumes and rates, on the other hand, remain stable with enough capacity to meet demand, Flexport said.