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CAVALRY IS COMING

Supply chain help is on the way from the passenger airline business

An airport worker carts away boxes of cargo from a passenger plane on a runway.
Kyodo via Reuters
  • Nicolás Rivero
By Nicolás Rivero

Tech Reporter

Published

On Nov. 8, the US will reopen its borders to vaccinated travelers from dozens of countries including China, India, Brazil, and much of Europe. International air travel to and from the US has been decimated by the pandemic, but it’s expected to rebound sharply as soon as the border restrictions are lifted. As passenger flights return to the sky, they’ll deliver much-needed relief to the world’s strained supply chains.

The reason is simple: More passenger air travel means more planes flying between the US and its global trading partners. Those passenger planes have cargo holds in their bellies, the largest of which can carry the equivalent of two 40-foot containers of freight. As more passengers travel in and out of the US after Nov. 8, the world’s air cargo capacity will expand just in time to quickly shuttle goods around the globe in the frenetic run-up to the holiday shopping season.

Air cargo capacity recovers from its pandemic slump

Ultimately, the freight industry needs passenger air travel to come back if it wants to move cargo through the air at the same levels it did pre-pandemic. Although passenger airlines expanded their air cargo operations during the pandemic, none of these efforts made up for the loss of the so-called “belly capacity” in the cargo holds of passenger planes, which used to account for as much as half of all air cargo capacity.

And there’s a limit to how much passenger airlines are willing to invest in cargo. Even United, which has made the biggest pivot to cargo of any passenger airline, has been wary of over-committing to freight for fear that demand will dry up in a couple of years. “If you look back to 2019, some cargo carriers were almost bankrupt,” United Cargo president Jan Krems told The LoadStar. “There will always be a downturn…the moment the world turns again, it’ll be too challenging.”

Transatlantic freight is the biggest beneficiary

The biggest increase in passenger flights will come on routes between the US and the EU, which accounts for about a fifth of American imports. Passenger bookings on transatlantic flights began to spike as soon as the US announced its impending border reopening on Sept. 20, according to data from the International Air Transport Association. The organization estimates that by December, US-EU air travel will recover to about three-quarters of its 2019 levels, up from 45% of 2019 levels in September.

Katja Busch, chief commercial officer for German freight giant DHL, said the US-EU passenger flights will be a key factor in helping global supply chains return to normal in 2022. “The belly capacity over the Atlantic is coming back,” she told Bloomberg. “That will take all the tension out of this destination, definitely.”

But transpacific freight won’t see as much of a boost. Even before the pandemic, Europe sent about twice as many international air travelers to the US as Asia. And although the US is opening its borders to vaccinated travelers from China, China has kept most of its pandemic travel restrictions in place, so passenger flights won’t offer much help unclogging the flow of goods between Chinese and US ports.

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