(Updated: July 2, 2020, 1:28 P.M.)
High airfreight rates and the urgent need for personal protective equipment have led to more direct all-cargo flights from Vietnam to the U.S., saving shippers time and money, according to logistics companies and airport managers.
Since mid-April, Wen-Parker Logistics has chartered 46 full freighters, the majority of them from Vietnam, carrying face masks for multiple U.S. customers, according to Brady Borycki, executive vice president, global business development. Three more aircraft are scheduled to arrive by the end of the week.
The company, based in Elmont, New York, is bringing the protective gear through several airports.
Atlas Air, for example, is operating about a dozen leased flights direct from Hanoi to Rickenbacker International Airport, a cargo-dedicated airport in Columbus, Ohio, and five flights to Newark, New Jersey.
“One thing that made this possible was the elevated rate levels this year. [Before], it wouldn’t have even been an option. It wasn’t really economical, or necessary, to charter direct from Vietnam,” said Borycki.
Most of the flights have been from Hanoi, with a few departing Ho Chi Minh City. Both cities are much farther from the U.S. than cargo gateways such as Shanghai and Hong Kong.
Without enough consistent volume to fill an entire plane, it previously wasn’t worthwhile in most cases for all-cargo operators to offer direct service to the U.S. Instead, freighters typically stopped along the way in another Asian city before flying over the Pacific and refueling in Anchorage, Alaska. Every stop adds to the transit time and costs, such as airport fees.
Cargolux and Cathay Pacific have each operated for a couple years regularly scheduled freighters to the U.S. that originate in Vietnam, but the flights always stop in Hong Kong first to get topped off, said Evan Rosen, president of the Americas region at Sri Lanka-based Expo Freight Logistics.
“We’d love to run weekly scheduled flights from Vietnam to Rickenbacker, but it’s just been cost prohibitive because of the fact that there is so much regular capacity based off of the passenger and cargo flights,” he said. “The rate levels were pretty depressed from Vietnam.”
At the higher rates and huge quantities involved, Wen-Parker and EFL have been able to get ad hoc airlift from carriers such as Atlas Air.
China Alternative
Interest in Vietnam as an alternative source of personal protective gear grew after China implemented stricter quality controls on face masks to prevent fraud. New procedures by China Customs slowed clearance and caused massive backlogs at Shanghai Pudong International Airport and, to a lesser degree, other Chinese airports.
Many apparel factories were able to easily convert production to personal protective gear. A company that makes Halloween costumes, for example, switched to make hospital gowns, said Bryan Schreiber, manager, air cargo business development for the Columbus Regional Airport Authority.
Vietnam has heavily invested in transportation infrastructure, including airports, since joining the World Trade Organization 15 years ago. Big planes and deepwater container ships can now support export-driven manufacturing. Countries like Cambodia are still catching up, Rosen said, noting Cambodia doesn’t have large enough runways to accommodate some widebody aircraft so freight is often trucked to Vietnam or Thailand.
Wen-Parker is primarily shipping non-medical-grade cotton masks for consumer use. Although demand for personal protective equipment has waned since the apex in April and May, it is still heavily occupying airline and airport resources at origin and destination, industry specialists say.
Some of Wen-Parker’s dedicated carriage is out of Hong Kong, with part of the planes filled with transshipped cargo from Vietnam. The freight forwarder has separately chartered 10 cargo-only passenger flights operated by United Airlines from Hong Kong to Chicago O’Hare International Airport, Borycki said.
Wen-Parker, he said, will continue to manage regular imports of face masks from Vietnam, as well as Indonesia, Thailand, Cambodia and China, but at lower quantities that will not require chartered aircraft.
EFL, which is 80% owned by Sagawa Express in Japan, is also moving large quantities of medical protective gear to Rickenbacker with direct charter flights as well as feeder service from countries throughout Asia to Dubai, where the shipments are consolidated and put on Emirates freighters, Rosen said. The forwarder has booked flights with personal protective equipment through August.
Weekly scheduled freighter flights from Vietnam to the U.S., even at main gateways such as New York and Los Angeles, could continue for the foreseeable future until passenger networks get rebuilt to previous density, he added.
But charter rates are dropping and if they fall another 5% to 10%, freighter operators won’t be able to justify the flights since there are no return loads, said Brian Bourke, chief growth officer at SEKO Logistics. At that point, charter opportunities will disappear and shipments will revert to regular, scheduled carriers moving through transit points.
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